The shine well and truly wore off risk assets in April, with global markets rattled by escalating geopolitical tensions as Iran took a shot across Israel’s bow. Furthermore, persistent inflation proved a fly in the ointment of imminent interest rate cuts, crushing the hopes of investors the world over.

US markets bore the brunt of the sell-off. While the economy slowed to a leisurely 1.6% annualised GDP in the first quarter, inflation data disappointed on the upside. The latest consumer prices were hotter than expected, labour costs topped expectations, and personal consumption - the Federal Reserve’s preferred measure of underlying inflation – shot up to 3.7%, markedly higher than expectations and well north of the 2% recorded in the final quarter of 2023.

However, the tide appeared to be turning toward month end as tensions in the Middle East eased and earnings season got into full swing. Robust results from the likes of Microsoft and Alphabet overshadowed a less stellar showing from the banks and sparked a relief rally – though not enough to claw back all the losses from the earlier rout.

While our local market wobbled under the weight of deteriorating global sentiment, the NZX’s defensive tilt shielded us from the worst of it. Meanwhile, a slowdown in first-quarter consumer inflation to 4% annualised was chalked up as a win. However, the domestic component was a less salutary 5.8%.

Across the pond, Australia’s quarterly inflation rate was 3.6% on a year-to-year basis – better than ours, but not quite good enough to make interest rate cuts a sure thing this year.

Against this backdrop, the S&P 500 slumped 4.2% in April, while the tech-focused Nasdaq fell 4.4%. The NZX 50 was down by a less drastic 1.2%, while the ASX 200 dropped by 3%.

The UK’s FTSE 100 outpaced its peers for a second month running, finishing April up by 2.4%. British central bankers were among the few to take a dovish tone as inflation in the UK continued to behave itself and jobless numbers crept up. Sterling subsequently plummeted to five-month lows.

 

GBP and AUD / NZD exchange rate change from 31 March 2024 to 30 April 2024:

 

GBP and AUD / NZD exchange rate change from 31 March 2023 to 30 April 2024:

 

Monthly Summary - April 2024

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Monthly Summary - February 2024

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Monthly Summary - January 2024

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Monthly Summary - December 2023

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Monthly Summary - November 2023

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Monthly Summary - April 2023

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Monthly Summary - March 2023

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Monthly Summary - February 2023

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Monthly Summary - December 2022

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Monthly Summary - November 2022

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Monthly Summary - October 2022

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Monthly Summary - September 2022

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Monthly Summary - August 2022

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Monthly Summary - July 2022

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Monthly Summary - June 2022

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Monthly Summary - May 2022

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Monthly Summary - April 2022

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Monthly Summary - March 2022

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Monthly Summary - February 2022

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Monthly Summary - January 2022

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Monthly Summary - December 2021

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Monthly Summary - November 2021

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Monthly Summary - October 2021

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Monthly Summary - September 2021

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Monthly Summary - August 2021

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Monthly Summary - July 2021

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Monthly Summary - June 2021

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Monthly Summary - May 2021

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Monthly Summary - April 2021

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Monthly Summary - March 2021

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Monthly Summary - February 2021

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Monthly Summary - January 2021

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Monthly Summary - December 2020

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Monthly Summary - November 2020

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Monthly Summary - October 2020

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Monthly Summary - September 2020

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Monthly Summary - August 2020

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Monthly Summary - July 2020

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Monthly Summary - June 2020

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