Introduction

April 2023 was a month of relative calm across global markets, with major economies absorbing the aftershocks of March's banking turbulence. Investor sentiment improved slightly as financial sector volatility faded and inflation data showed signs of continued moderation. While economic growth appeared to be slowing in some regions, central banks pressed ahead with their tightening cycles, albeit with more caution. Equity markets generally trended higher, supported by resilient corporate earnings and signs of stabilisation in the credit space.

United States

U.S. markets posted modest gains in April. The S&P 500 rose approximately 1.5%, while the Nasdaq Composite outperformed, advancing over 2.0% on strength in technology and communication services. First-quarter earnings results were better than expected, with many large-cap companies reporting solid revenue growth and effective cost management.

On the macro front, inflation continued its downward trajectory, with the March CPI (released in April) rising by 5.0% year-on-year, down from 6.0% in February. The Federal Reserve maintained a cautious tone ahead of its May meeting, acknowledging tighter credit conditions following the March banking turmoil but reaffirming its commitment to price stability. Yields on the 10-year Treasury remained range-bound around 3.5%.

Europe

European equities advanced as confidence returned to the banking sector and energy prices remained subdued. The Euro Stoxx 50 gained nearly 2.4%, led by strong performances in consumer discretionary, industrials, and luxury goods sectors.

Eurozone inflation eased to 6.9% in March (year-on-year), driven by lower energy costs, though core inflation remained persistently high. The ECB signalled further rate hikes in the coming months, but market expectations began to reflect a more gradual tightening path. Meanwhile, improving consumer sentiment and positive PMI data pointed to a mild economic rebound, helping offset concerns about slowing lending activity.

Asia-Pacific

Asian markets showed mixed performance in April. In China, economic data was broadly positive, confirming that the post-COVID reopening was translating into growth. Q1 GDP rose by 4.5% year-on-year, beating expectations. The Hang Seng Index added 2.3%, while the Shanghai Composite gained 1.5%.

Japanese equities rallied, with the Nikkei 225 rising over 2.9% on improved corporate earnings and a weaker yen. In Australia, the ASX 200 was flat for the month as financials recovered but mining shares underperformed on softer commodity prices. The Bank of Japan maintained its ultra-loose policy at its April meeting, but markets closely watched Governor Ueda's first statements for signals of future adjustments.

Emerging Markets

Emerging markets posted modest gains in April, helped by a stable dollar, supportive commodity prices, and improved capital flows. The MSCI Emerging Markets Index advanced 1.8%, with notable strength in Latin America and Southeast Asia.

India's equity markets rose on the back of strong domestic economic data and resilient corporate earnings. Meanwhile, Brazil and Mexico benefited from supportive central bank policy signals and firming commodity prices. However, South Africa and Turkey underperformed due to persistent inflationary pressures and political risks.

Commodities

Oil prices were volatile during April. Brent crude briefly surged to USD 87 per barrel after OPEC+ announced surprise production cuts, before easing to around USD 79 by month-end due to concerns over weakening global demand.

Gold continued to climb, touching USD 2,000/oz in early April before settling near USD 1,990/oz. Investor interest remained strong amid ongoing uncertainty around inflation, geopolitics, and the future pace of interest rate hikes. Copper and other industrial metals remained stable, with Chinese demand showing signs of recovery but not accelerating dramatically.

Fixed Income & Currencies

Bond markets traded in narrow ranges for most of April. The U.S. 10-year Treasury yield hovered around 3.45–3.55%, reflecting a balanced outlook on inflation, growth, and Fed policy. Credit markets remained resilient, with spreads narrowing modestly as banking stress subsided.

Currency markets saw a rebound in the euro and yen, while the U.S. dollar softened slightly against a basket of peers. The Singapore dollar remained stable following the Monetary Authority of Singapore (MAS)'s decision to maintain its policy stance in April, citing a need to assess cumulative tightening effects on the economy.

Outlook

As markets move into May, attention turns to the next round of central bank meetings, corporate earnings releases, and global inflation prints. While risk appetite improved in April, uncertainty remains elevated around the long-term effects of tighter credit conditions, ongoing rate hikes, and geopolitical flashpoints.

Brightness Capital & Asset Advisory continues to advocate for disciplined diversification and sector-specific positioning, with an emphasis on liquidity and resilience. We remain focused on identifying asymmetric opportunities across asset classes while closely monitoring macroeconomic developments for signs of a turning point in the global cycle.