It was a short, but broadly positive week for equity markets ahead of the Easter break.
Moves in oil prices made the headlines following a surprise cut in production announced by OPEC (Organisation of the Petroleum Exporting Countries) members on Sunday. Both Saudi Arabia and Russia agreed to reduce supply by 500k barrels a day, in a move designed to prop up prices ahead of the predicted slowdown in the global economy. Having fallen rapidly to trade at roughly $73 a barrel in mid-March as financial contagion worries took hold, Brent crude is now back to $85 a barrel following the announcement.
The jump in prices seen this week will likely frustrate central bankers (and motorists!) who would have been hoping the reduction in the oil prices could do some of the heavy lifting required to bring inflation down in the coming months, and perhaps not require interest rates to be increased much further.
Anyone planning an Easter getaway will be pleased to see the pound quietly making gains in recent weeks. Sterling has experienced a solid first quarter of 2023, benefiting from a run of economic data that has proven stronger than many analysts had predicted. Against the dollar, sterling now trades at a 10-month high of around $1.25. Whilst on paper this still sits in the lower part of its five-year range, it is a marked improvement following the shambles of the mini-budget when it fell to around $1.08.
Wishing all of our readers a wonderful Easter break and the best of luck on the egg hunting front!
John Naylor, Chartered FCSI – Head of Investment Committee