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As events continue to unfold in the Middle East, we are reminded how precarious the geopolitical landscape is.

For Jerome Powell and other members of the Federal Reserve (Fed), the Consumer Price Index (CPI) print this week was well and truly a fly in their ointment.

In the first quarter, bond and equity markets decoupled as investors pared back the number of expected interest rate cuts this year, driving a fall in bond prices.

Last year, as billions of dollars’ worth of debt neared maturity dates, many borrowers faced potentially debilitatingly high refinancing costs, raising fears of widespread defaults. But these fears are abating, leaving companies rushing to sell debt in a resilient bond market.

In what’s been a highly charged week for developed market central banks, for once, attention moved East.

The European Central Bank (ECB) met last week, and given economic growth remains mixed and inflation is coming down slower than anticipated, members strongly indicated their first rate cut would be in June.

It was an exceptionally busy week for economic data and large events. In addition to US and China services data and US payrolls, China’s National People’s Congress met, one-third of US voters went to the polls, the UK budget was revealed and Federal Reserve (Fed) Chairman Jerome Powell had his congressional testimony.

The age-old debate about active versus passive investing persists – the former involving buying and selling shares with the aim of outperforming the market and the latter,– where index funds and exchange-traded funds (ETFs) track a specific index by buying and holding assets.

China and Europe’s deep economic ties deteriorated when Russia invaded Ukraine in early 2022, and relations face further pressure as China strengthens its foothold in the global electric vehicle market, which is cannibalising Europe’s own EV sector.

“History doesn’t repeat itself, but it often rhymes.” This phrase, often attributed to American writer Mark Twain, is frequently used by those in the financial industry who caution about relying on history too readily for future forecasting.