In the April issue, we look at how markets have started to put the Ukraine crisis behind them as hopes rise for a ceasefire. However, commodity markets remain volatile, which continues to be disruptive for the global economy.
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Stock markets have now risen above their pre-invasion levels as they start to anticipate a possible de-escalation in the Russia/Ukraine crisis. Ukraine’s concession on not joining NATO may open the door to a potential diplomatic solution. Nevertheless, the situation remains febrile and difficult to predict.
Western sanctions continue to create disruption for the global economy. Energy market volatility is also causing problems, particularly in Europe. There have also been significant spikes in commodities such as nickel and wheat as supply problems bite.
Interest rate rises from the Federal Reserve and Bank of England were greeted with equanimity by markets, with investors relieved that central banks appeared to be taking charge of inflation. However, consumers face a double whammy of rising rates and costly food and energy bills. On balance, our base case is that the global economy will make progress in 2022, but it will be volatile.
By necessity, this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. This briefing does not constitute advice nor a recommendation relating to the acquisition or disposal of investments. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. Details correct at time of writing.
Please remember investment involves risk. The value of investments and the income from them can fall as well as rise and investors may not receive back the original amount invested. Past performance is not a guide to future performance.