Investment Institute
Monthly Market Update

April Global Macro Monthly - Inflation to rise, but how fast and for how long?

  • 21 April 2021 (7 min read)

Key points

  • Virus and vaccines continue to drive growth outlooks. China saw a slower first quarter, but we raise our annual outlook. The Eurozone faces several downside risks, but the outlook is brighter in the UK. Emerging market developments are mixed.
  • US activity has also been supplemented by additional fiscal stimulus. We raise our annual growth forecast again. Yet inflation is only expected to rise gradually to target after volatility in 2021.
  • The Fed has convinced markets of long-term accommodation for now. The European Central Bank continues to deliver faster Pandemic Emergency Purchase Programme purchases.
  • Bond yields have fallen despite ongoing fundamental concerns, in part reflecting the cost of short positions. This has also allowed a bounce in EURUSD. Credit markets have proven a good steer to equity markets and continue to suggest supportive risk outlook.

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