Markets Unwrapped: April 2026
April saw markets stabilise following a volatile March, as investors continued to navigate persistent inflation, geopolitical tension, and shifting interest rate expectations. In the United States, markets showed signs of consolidation as investors adjusted to “higher for longer” interest rate forecasting. Ongoing conflict in the Middle East has kept energy prices elevated, sustaining inflation concerns and limiting the likelihood of near-term rate cuts. As a result, growth sectors, particularly technology, remained under pressure, while energy and financials demonstrated resilience. European markets faced similar challenges, with rising energy costs continuing to impact both businesses and consumers. While expectations for further rate tightening have increased, comparatively attractive valuations may provide longer-term opportunities once conditions stabilise.
Across Asia, sentiment remained cautious. China continued targeted stimulus efforts to support growth, particularly in infrastructure and property.
In Australia, markets were mixed. Resource and energy sectors benefited from higher commodity prices, while interest rate sensitive sectors continued to face ongoing pressure. The Reserve Bank of Australia has maintained a tightening bias, as inflation remains elevated and the labour market resilient. Recent CPI data revealed inflation has increased to 4.6%, supporting the markets sentiment that a cycle of interest rate hikes can be expected. This has however continued to support domestic bond yields and attract investor interest toward fixed income.
Looking ahead, markets remain driven by inflation trends, central bank policy, and geopolitical developments. Volatility continues to be expected until the geopolitical unrest begins to settle.
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