Last week the markets were broadly positive with global equities, led by Europe, rising a little bit above 1%. That equates to an almost 6% uplift in local currency terms from their pre-Easter March lows.

While the headline US inflation rate in March fell from  6% to a more palatable 5%, less positively the core rate remains broadly unchanged at 5.6%. The Fed now expects a mild recession later this year as a result of recent banking sector ‘hiccoughs’, but indications seem to infer there might only be the need for one final 0.25% rate increase in the foreseeable future (likely to be implemented in early May).US first quarter earnings also seem to have got off to a better than expected start. However, despite estimates for the S&P 500 to edge higher, the expectation is still that earnings will be down 5% or so compared with last year.

In the UK, ongoing strike action, and the ripples emanating from them, continue to take their toll on both the markets themselves and wider market and popular sentiment. GDP is clearly suffering with February lying flat and up a mere 0.1% over the past three months. There is no perceptible end in sight – as evidenced by current action from the Nurses and Doctors unions.

However, as some consolation, the latest data suggests that UK GDP is finally back above pre-Covid levels, albeit much later than both the US and Eurozone both of which are already 5% and 2.4% higher respectively. Many fingers are now firmly crossed that, hopefully, this week’s UK March inflation numbers, due on Wednesday, should show a modest decline rather than a nasty upward surprise as happened last month.