April 2024

March Market Roundup

• Global markets did well in March, with risk assets responding positively to global central banks’ assessment of disinflation remaining intact. Despite stickier-than-expected inflation prints in the US, global and US equities were up 3% on the month. European equities did even better, rising 4% to 5%.
• Fixed income eked out small monthly gains as well, with high-yield and emerging market (USD) debt up nearly 2%. US Treasuries and Global Bonds did less well with gains of under 1%.
• The two main drivers of global markets in March were the “AI effect” and the assessment, by major global central banks, that notwithstanding a few higher-than-expected inflation prints the broader disinflationary trend was still intact. For instance, at its March FOMC meeting, the Federal Reserve kept interest rates steady as expected, but their economic projections hinted at a more cautious approach to lowering rates.
• In the Euro area, national inflation data (Germany, Spain, and France) was broadly in line with expectations, supporting a gradual disinflation in headline measures, and remaining price stickiness in the service component.
• Finally, the Bank of Japan (BoJ) ended its negative interest rate policy and scrapped its yield-curve-control framework in a notable step towards policy normalization. However, we do not see this as the start of a prolonged hiking cycle.