Markets Continue Broad Retreat

Equity and fixed income markets continued their broad retreat in April as investors remained fixated on the war in the Ukraine, extended COVID-19 lockdowns in China, and questions of whether central banks, led by the Fed, can rein in multi-decade high inflation without derailing the global recovery, says FTSE Russell’s ‘April 2022 Monthly Performance Report.’ Despite some relief in March, most equity markets ended the first quarter lower as the crisis in Europe, the launch of central-bank tightening cycles, fresh COVID-19 lockdowns in China, and persistent supply-chain constraints intensified worries about slowing growth and stirred wild swings in risk sentiment. Global bond markets also broadly fell in the quarter, despite periodic flight-to-safety rallies. The crisis in Eastern Europe and widening yield differentials continued to support the U.S. dollar, though it weakened versus the commodity-sensitive currencies, led by the Brazilian real. Europe ex UK and Japan were the hardest hit developed markets in the quarter, while the UK showed the most resilience.