Despite concerns about a possible recession, investor sentiment remained largely positive in April. Investors were initially spooked as minutes from the US Federal Reserve’s (‘Fed’) March meeting predicted that the US would fall into recession “later in the year”. US CPI data came in at a two-year low of 5.0% year-on-year (y/y), although core CPI (which excludes volatile baskets such as energy and food) rose to 5.6% year on year. The idea of stickier inflation has reinforced the belief that the Fed has at least one more rate increase in store. Investors moved on quickly as a strong earnings season boosted global share markets, seeing the S&P 500 finish the month up 1.6%. Although April ended with worries about the US banking sector, the likelihood of a recession still exists, leading to uncertainty for what lies ahead.

Global listed property markets bounced back in April (2.1%) after consecutive months of negative returns. This came despite the continued pressure of rising interest rates, as increasing consumer confidence and the ‘peak interest rate narrative’ tentatively points to a recovery. Global listed infrastructure also posted positive returns, up 2.2%.

The NZ Dollar was down against most major currencies as weaker than expected inflation and the resulting impact on future rate increase expectations took their toll. The NZ Dollar also fell -2.9% against the Pound and -2.8% against the Euro but managed to edge out a small 0.1% gain on the AUD after the RBA opted to pause its tightening cycle.