Weekly Market Review - 20-04-2026

4 days ago
5 min read

This week’s update highlights a strong rebound in global equity markets, with improving investor sentiment driving a more positive, risk-on tone. While markets have moved higher, attention remains firmly on the evolving geopolitical backdrop, inflation pressures and central bank policy, all of which continue to shape the near-term outlook. Alongside this, we explore key developments across commodities, ESG and the global economy, providing a rounded view of the forces influencing markets today.

Market Recap.

Equity markets delivered a notably strong week, with investor sentiment improving sharply and risk appetite returning across global markets.

UK equities moved higher, with the FTSE 100 ETF rising 0.87%. While gains were more modest compared to global peers, the move reflects a continued stabilisation in domestic market conditions.

US markets led the rally, posting some of the strongest weekly gains seen in recent months. The Dow Jones Industrial Average ETF increased by 3.10%, while the S&P 500 ETF gained 3.38%, highlighting broad-based strength across the market.

Technology stocks once again outperformed, with the Nasdaq 100 ETF surging 5.33%, driven by strong momentum in growth-oriented names and renewed investor confidence in the sector.

Overall, the week marks a clear shift toward a more constructive and risk-on environment, with markets rebounding strongly and building on the more positive tone seen recently.

News.

The UK government is stepping up engagement with the financial sector as it responds to the growing economic impact of the Iran conflict. Chancellor Rachel Reeves has called in senior executives from the UK’s top banks for talks this week, as policymakers assess the implications of rising energy prices and slowing growth.

The meeting comes against a more challenging economic backdrop, with the International Monetary Fund warning that the UK could be among the hardest hit major economies due to its reliance on imported energy. Banks are also preparing for potential strain, with some expected to increase loan loss provisions amid weaker growth forecasts.

Encouragingly, recent data showed UK GDP grew by 0.50% in February, suggesting some underlying resilience. However, the discussions are expected to focus on how banks can continue supporting households and businesses facing inflationary pressures, as well as potential regulatory reforms aimed at supporting lending and economic growth.

Inflation.

Inflation remains in focus, with higher energy prices linked to the Iran conflict continuing to influence the outlook.

The International Monetary Fund (IMF) has cut its UK growth forecast to 0.80% for 2026 and expects inflation to rise to around 3.20% this year, among the higher levels in developed economies.

However, the IMF suggests this pressure is likely to be temporary, with inflation expected to “pick up temporarily” before easing back toward the Bank of England’s 2.00% target as energy costs stabilise.

Policymakers are also being urged to remain measured, with the IMF warning that reacting too aggressively “risks a recession later.”

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.

Commodities.

Commodity markets remain sensitive to geopolitical developments, with volatility persisting as investors continue to monitor the evolving situation in the Middle East.

Precious metals are still reflecting a cautious backdrop. Gold is trading around $2,180 per ounce, while silver sits near $25 per ounce, supported by ongoing safe-haven demand despite some moderation from recent highs.

In energy markets, oil prices have edged higher again. WTI crude is trading around $86 per barrel, with Brent crude near $89 per barrel, as markets price in continued geopolitical risk.

The earlier surge in prices was driven by concerns over potential disruption to key supply routes, particularly the Strait of Hormuz. While no major supply interruptions have materialised, the risk premium remains embedded in prices, leaving markets highly reactive to further developments.

ESG.

The European Banking Authority (EBA) has proposed a significant simplification of ESG supervisory reporting for banks, aiming to reduce complexity and improve usability. The changes are designed to streamline data requirements, making it easier for institutions to comply while still providing regulators with meaningful insight into climate and sustainability risks.

Importantly, the proposal reflects a shift in approach — moving away from overly complex frameworks toward more practical, decision-useful reporting. The EBA noted the changes are intended to “simplify and enhance” existing requirements, reducing the reporting burden without weakening oversight.

Geopolitics.

Geopolitical tensions in the Middle East remain elevated, with the conflict involving Iran, the United States and Israel continuing to evolve rapidly.

Recent developments suggest a fragile and uncertain path toward de-escalation. A temporary ceasefire is under pressure, with renewed tensions following the seizure of an Iranian vessel by US forces and ongoing disagreements over the terms of future negotiations. Iran has described US demands as “unrealistic,” raising doubts over whether planned peace talks will proceed.

Encouragingly, diplomatic efforts are still ongoing, with talks expected to take place in the coming weeks. However, the situation remains highly fluid, and the risk of further escalation persists if negotiations fail or tensions intensify.

Week Ahead.

United States

Attention picks up on Tuesday 21 April, with retail sales, business inventories and pending home sales all due, offering a key read on consumer strength and economic momentum.

Focus then shifts to Thursday 23 April, with weekly jobless claims providing an update on labour market conditions, alongside S&P Global flash PMI data for April, giving an early indication of business activity.

The week concludes on Friday 24 April with the University of Michigan Consumer Sentiment Index (final reading), offering further insight into consumer confidence amid ongoing inflation concerns.

United Kingdom In the UK, the data calendar is relatively light this week, but markets will remain focused on the broader economic backdrop, particularly inflation and energy-driven pressures. Investors will also be watching for any commentary from the Bank of England as it assesses the impact on growth and interest rate expectations.

Eurozone

Across the Eurozone, attention will centre on business activity indicators, with flash PMI data due on Thursday 23 April providing a timely snapshot of both manufacturing and services performance. Markets will also monitor commentary from European Central Bank officials for further signals on the policy outlook.

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.