Weekly Market Review - 13-04-2026

Apr 13
6 min read

This week’s update reflects a more positive shift in market sentiment, with equities rebounding despite a complex and evolving global backdrop. While inflation has re-emerged as a key concern, particularly in the United States, central banks continue to signal a cautious, higher-for-longer approach to policy. At the same time, geopolitical tensions and political developments across the UK and Europe remain key drivers of market direction, reinforcing the importance of a balanced and forward-looking investment outlook.

Market Recap.

Equity markets moved higher this week, with a more positive tone returning as investor sentiment improved despite ongoing geopolitical uncertainty.

UK equities advanced, with the FTSE 100 ETF rising 1.70%, supported by gains across large-cap stocks and a stabilisation in broader market conditions.

US markets also delivered strong performance. The Dow Jones Industrial Average ETF increased by 1.61%, while the S&P 500 ETF gained 2.29%, reflecting broad-based strength across the market. Technology stocks once again led the way, with the Nasdaq 100 ETF rising 3.21%, extending its recent outperformance.

Overall, the week signals a shift back towards a more constructive risk environment, although markets remain sensitive to geopolitical developments and the evolving economic outlook.

News.

The UK government is considering new legislation that could allow it to adopt elements of EU single market rules, in a move aimed at reducing trade friction and supporting economic growth.

The proposed bill would enable “dynamic alignment” in areas such as food standards, allowing the UK to mirror certain EU regulations as they evolve. A Labour source stated the changes would “lower costs for businesses and get rid of the Brexit paperwork tax that adds to the cost of the weekly shop,” highlighting the economic rationale behind the shift.

Prime Minister Keir Starmer has framed the move as part of a broader reset in relations, noting that “the UK’s best interests are in a stronger, closer relationship with Europe,” particularly across trade and the wider economy.

However, the plans have drawn strong political opposition. Conservative leader Kemi Badenoch described the approach as “the worst of both worlds,” arguing it risks the UK “taking EU rules without having a vote on them,” while critics have raised concerns over reduced parliamentary scrutiny through the use of secondary legislation.

Inflation.

Inflation in the United States has re-accelerated, rising to 3.30% year-on-year in March, up from 2.40% in February and marking its highest level in nearly two years. The increase represents the sharpest monthly rise since 2022, highlighting a renewed challenge for policymakers as price pressures pick up again.

While the move has been largely driven by energy-related factors, the broader concern for markets is the extent to which these pressures begin to filter through into the wider economy. Categories such as airline fares and clothing have already shown signs of upward pressure, suggesting some early spillover effects beyond energy.

Encouragingly, underlying inflation remains more contained. Core inflation, which strips out volatile food and energy components, rose by a more modest 2.60%, indicating that broader price dynamics have not yet fully re-accelerated.

As one analyst noted, this currently appears to be “an energy-led re-acceleration with contained spillovers, rather than a fully entrenched second-round inflation dynamic.” However, there is a clear risk that if elevated costs persist, they could begin to feed more broadly into pricing, wages and inflation expectations.

Central Banks.

Central banks continue to signal a cautious stance on monetary policy, with the European Central Bank indicating that interest rates are likely to remain higher for longer as inflation risks persist.

Recent commentary from policymakers suggests growing confidence that current rates are appropriately restrictive, but not yet at a point where easing can be considered. One ECB policymaker noted there is a “clear path” toward maintaining restrictive policy, reinforcing expectations that rate cuts are not imminent.

Officials have also emphasised the need for patience, with one source stating that policymakers “need to be absolutely sure” inflation is sustainably returning to target before adjusting policy. This reflects ongoing concern that external pressures, including energy prices and geopolitical developments, could still disrupt the disinflation process.

For markets, the message remains consistent: while the peak in rates may have been reached, central banks are in no rush to ease policy. This higher-for-longer narrative continues to shape expectations across fixed income and equity markets, particularly as inflation dynamics remain uncertain.

Commodities.

Commodity markets remain sensitive to geopolitical developments, with volatility persisting into mid-April, although price pressures have eased from the sharp spikes seen in recent weeks.

Precious metals continue to reflect a cautious investor backdrop. Gold is trading around $2,200 per ounce, while silver remains near $25 per ounce, supported by ongoing safe-haven demand alongside shifting expectations for interest rates.

In energy markets, oil prices are still elevated but have stabilised. WTI crude is trading around $81 per barrel, with Brent crude near $85 per barrel, both moderating from recent highs.

The earlier surge was driven by escalating tensions in the Middle East and concerns over disruption to key supply routes, particularly the Strait of Hormuz. While those risks remain firmly in place, markets have steadied as immediate supply interruptions have yet to materialise, though sentiment remains highly reactive to further developments.

ESG.

The UK government has approved the development of its largest solar farm to date, marking a significant step forward in the country’s transition toward renewable energy.

The Springwell Solar Farm in Lincolnshire is expected to power around 180,000 homes and will include battery storage, reinforcing the role of solar in improving energy security. Energy Minister Michael Shanks emphasised the strategic importance of the project, stating: “Solar is one of the cheapest forms of power available and is how we get off the rollercoaster of international fossil fuel markets and secure our own energy independence.”

The decision reflects a broader policy push toward accelerating domestic clean energy generation, particularly in light of recent geopolitical instability impacting global energy markets.

Geopolitics.

Efforts to de-escalate the conflict between the United States and Iran appear to be faltering, with peace talks losing momentum as both sides continue to assert control over the Strait of Hormuz. This strategically critical shipping route remains central to global energy markets, carrying a significant proportion of the world’s oil supply. As a result, the risk of disruption continues to underpin volatility in energy prices and broader financial markets, with investors closely monitoring any signs of escalation or diplomatic breakthrough.

Beyond the Middle East, a significant political shift has emerged in Europe. Hungary has undergone a dramatic change in leadership, with Péter Magyar securing a decisive electoral victory, bringing an end to Viktor Orbán’s 16-year tenure in power. The scale of the win, likely to deliver a constitutional majority, signals a clear mandate for political and economic reform.

This transition could have meaningful implications for Hungary’s position within the European Union. Under Orbán, relations with the EU had become increasingly strained, particularly over governance concerns and closer ties with Russia. Magyar has campaigned on a platform of strengthening relationships with the EU and Ukraine, pointing to a potential realignment in Hungary’s foreign policy and economic direction.

Week Ahead.

United States

In the United States, focus will be on consumer strength and inflation dynamics. Retail sales data, due midweek (Tuesday 14 / Wednesday 15 April), will provide a key read on how households are responding to rising prices. Industrial production (Wednesday 15 April) will offer further insight into economic momentum, while Initial Jobless Claims on Thursday 16 April will be closely watched for any signs of softening in the labour market. Markets will also remain alert to Federal Reserve commentary following the recent rise in inflation.

United Kingdom In the UK, attention centres on inflation and labour market data. Employment figures are expected on Tuesday 14 April, offering insight into wage growth and labour conditions. This is followed by the Consumer Price Index (CPI) release on Wednesday 15 April, a key indicator for assessing whether inflationary pressures remain persistent and how the Bank of England may respond.

Eurozone

Across the Eurozone, the focus will be on sentiment and inflation. The ZEW Economic Sentiment Survey, due Tuesday 14 April, will provide a forward-looking view of investor confidence. Final inflation data is expected toward the end of the week (Thursday 16 / Friday 17 April), helping to confirm the trajectory of price pressures across the bloc. Markets will also continue to monitor commentary from European Central Bank officials, particularly given the evolving geopolitical backdrop.

It is important to note that the geopolitical situation remains highly fluid, and developments are changing rapidly. As such, the outlook may shift quickly as new information emerges.