Market Update

Global markets remained relatively stable this week, reflecting cautious optimism as investors processed a fresh wave of economic data, central bank commentary, and geopolitical signals. The tone across equity and bond markets suggests that while uncertainty remains, there is growing confidence in the resilience of key economies.
In the United States, inflation figures came in broadly in line with expectations. Core CPI rose 0.3% in April, suggesting that price pressures are easing gradually without derailing consumer demand. The data reinforced the Federal Reserve’s wait-and-see stance, as officials continue to stress a data-dependent approach. In a widely watched address, Fed Chair Jerome Powell reiterated that the central bank is “prepared to act if necessary” but is “in no rush” to adjust rates further. Markets interpreted his remarks as a sign that the Fed is likely to remain on hold unless inflation or employment figures significantly deviate from current trends.
Across the Atlantic, UK economic data offered a mixed snapshot. Retail sales dipped slightly in April, reflecting cautious consumer behaviour amid sticky inflation and ongoing wage pressures. However, the UK’s Q1 GDP came in at 0.3%, modestly beating expectations and easing concerns of a technical recession. The Bank of England, following last week’s rate cut, signalled it would pause further action for now, as it assesses the impact of its decision on consumer sentiment and borrowing conditions.
The European Central Bank also struck a measured tone, with President Christine Lagarde suggesting that any further policy tightening would be “highly data-dependent,” citing both improved energy market stability and lingering supply chain bottlenecks.
In Asia, markets reacted positively to Japan’s Q1 GDP growth of 0.5%, driven by stronger-than-expected domestic demand and a rebound in tourism. The yen remained under pressure, however, prompting speculation about potential intervention or monetary policy recalibration by the Bank of Japan in coming weeks.
On the trade front, diplomatic efforts continued to gain momentum. The UK-EU summit produced a joint statement outlining intent to streamline post-Brexit customs processes, though no formal agreement was reached. Meanwhile, the UK-India trade talks advanced to a new phase, with negotiators reportedly narrowing gaps on services and digital trade provisions. Progress here could unlock significant opportunities for sectors such as fintech, education, and pharmaceuticals.
Tensions between the U.S. and China remained a market watchpoint. While no major breakthroughs emerged from the preliminary talks in Switzerland, both sides described the meetings as “constructive,” with additional sessions scheduled for June. Analysts are watching closely for signs of movement on tariffs, export controls, and technology transfers.
Looking ahead, markets will be tuned into upcoming manufacturing and services PMIs from major economies, as well as U.S. jobless claims and UK inflation figures. With geopolitical undercurrents and central bank caution defining the current landscape, investors are bracing for a continued environment of selective risk-taking and data-driven positioning.