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April Market Commentary


Chancellor of the Exchequer Rishi Sunak delivered his budget early March. Among the announcements were measures designed to support the economy as it continues its recovery from the depths of the COVID-induced crisis. These included: an extension of the popular furlough scheme with the government continuing to pay 80% of employees’ wages for hours they cannot work; increasing grants to the self-employed; a so-called ‘super-deduction break for businesses, whereby they can claim 130% capital allowances on qualifying plant and machinery investments, and for every pound invested taxes are cut by up to 25%. The Chancellor also provided some economic numbers and forecasts which were predictably mixed. On the positive side, unemployment is predicted to peak at 6.5%, lower than the 11.9% previously predicted, and economic growth predicted to come in at 7.3% next year. Less positively, government borrowing will total £234 billion in 2021-22, with borrowing at a peacetime record of £355 billion this year.

The Chancellor also spoke on the Lord Hill review, which has looked into how to make the UK’s listing rules more competitive to attract a greater amount of tech companies to the UK stock market. Critics worry that shareholder protection may get watered down, but so far the UK’s inability to attract top tech listings has proven problematic for the makeup of the country’s major stock markets.

The process of lifting lockdown restrictions began in March. From the 8th, all schools and colleges have begun to reopen with afterschool clubs to resume, two people from different households can now meet outside for both recreation and exercise, and care home residents can nominate a single visitor who can now visit regularly. Further restrictions were lifted from the 28th allowing for outdoor sports in teams to resume along with the rule-of-six where up to six individuals can meet outside. There will be additional resumptions to normal life over the coming months as the UK looks to continue its drive to vaccinate all adults.

In the ongoing Brexit saga, the UK has angered the EU by saying it would wave customs paperwork on food entering Northern Ireland until October, with supermarkets struggling under the new terms. The EU has said it will take legal action. This is unlikely to be the only battle between the two nations as the initial impacts of Brexit continue to unfold. Recent data shows that exports from the UK to the EU plunged 41% since the end of the transition period, with imports from the EU falling by 29%. More positively, though, both parties have recently agreed a post-Brexit deal on financial regulation that should see greater access to the EU market for UK financial service firms. A memorandum of understanding has been agreed which lays out the framework for regulatory cooperation and a joint forum for discussing rules, procedures, and the sharing of information.


German Chancellor Angela Merkel’s party has just seen its worst election results ever in recent regional elections, with voters protesting the ongoing lockdown measures and the troubled vaccine rollout in the country. The recent election results are troubling for Angela Merkel and those on the centre-right who now fear a more radical government could be on the way and that the next leader may not be overly conservative compared with Merkel. This will be watched closely by the EU where German influence is high. Her popularity took a further hit when she was forced to backtrack on a planned 5-day Easter lockdown, which German citizens revolted against.

In a move backed by France, Italy blocked a shipment of exports of the AstraZeneca vaccine to Australia, with Rome citing that it does not consider Australia to be a “vulnerable country”. Canberra urged Brussels to review the decision, however the EU Commission, which has the power to object to the move, did not.

Various EU countries suspended the AstraZeneca vaccine, including Germany, Ireland, France, Italy and others after concerns were raised about a potential link to blood clots. AstraZeneca denied any link, stating that they found no evidence in test data that showed prevalence of blood clots was any more than what would be expected in normal conditions across the general population. For context, at the time of writing roughly 30 people have experienced blood clots out of over 18 million who’ve been given the jab. Shortly after the suspension, the European Medicines Agency (regulator) reaffirmed its position that the benefits of the vaccine far outweigh the risks, which promptly saw most countries reinstate the shot for use. Severe damage has already been done across the continent to the AstraZeneca vaccine’s reputation, with over 60% of French and German citizens believing the shot to be unsafe.


New data shows the US added 379,000 jobs in February, indicating a sharp rebound in the labour market as COVID-19 cases continue to decline. The increase in jobs added was more than double the disappointing figures from January, but still leaves unemployment at 6.2%, with a total 9.35 million less jobs than pre-pandemic.

President Joe Biden has recently confirmed that 90% of all US adults will be eligible to receive their COVID-19 jab in three weeks with the number of pharmacies where shots are available to double. The US remains far ahead of much of the world with its vaccination programme, and the news on availability will be welcomed by many as the country continues to see high case numbers, with hospitalisations at roughly 4,800 per day, and the death rate starting to rise again. The US, along with most countries, is balancing economic freedom with virus prevention.

On the spending front, Biden will unveil his vision for a mass ramp-up in U.S. infrastructure spending in Pittsburgh today. Brian Deese, one of Biden’s top economic aides, told senior congressional Democrats on Tuesday that the infrastructure package would amount to about $2 trillion over eight years, according to a person familiar with the discussion. That would be paid for over a 15-year period with a bump in the corporate tax to 28% from 21% and the introduction of a minimum tax on global corporate earnings, another person said.

Iran has indicated it would be willing to resume nuclear talks with the US pending the removal of existing sanctions on the nation within the year, paving the way for what would be seen as crucial re-engagement from the US in the Iran nuclear deal. The previous administration under Donald Trump took a hard line against Iran, pulling out of the previously agreed agreement with several allied countries and imposing harsh economic sanctions on the already struggling country. Critics argued this was unlikely to be a successful approach and that Iran would continue developing its nuclear weapons anyway.


Myanmar has declared full martial law in parts of the capital Yangon after China pushed authorities there to protect Chinese people and businesses after several factories were burned down. Reports suggest that more than 138 peaceful protestors including children have been shot dead by the Myanmar military since the coup.

We had a meeting between China and the US earlier this month, the first such meeting since President Biden took office. The meeting always promised to be confrontational as it indeed turned out to be, with the two countries arguing on human rights, trade, and much more. China has also recently signed a 25-year strategic partnership with Iran, a move which will no-doubt further inflame tensions between China and the US. The deal will see China invest in Iran and buy oil from the country.

In other China news, China’s highest-profile political meeting of the year concluded on Thursday (11/03). Of note was that the ruling government wants to focus on making the domestic economic expansion more sustainable by reducing debt levels and encouraging companies to be more innovative, with Beijing also targeting a smaller budget deficit for this year, down to 3.2% of GDP from 3.6% last year. Authorities also kept monetary policy message unchanged, being to support economic growth, control financial risks – such as asset bubbles – and keeping market liquidity levels in the financial system broadly stable. Economists are currently targeting 6% GDP growth in 2021 which is well below the previously-predicted 8.4%.

In Japan, a record budget of nearly $1 trillion (¥166 trillion) was approved by parliament, which includes five trillion Yen in emergency spending related to the pandemic. This follows from three COVID-19 packages worth a combined $3 trillion already rolled out in the current fiscal year.

Please note: The opinions expressed in this update are those of A&J Wealth Management Limited only, as at the 1st April 2021 and are subject to change. The update is for information purposes only.

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