It was easy to make money in March; equities, bonds, commodities, gold and bitcoin were all up. Bitcoin gained 14.2 per cent, thanks to the launch of bitcoin exchange traded funds (ETFs) in the US earlier this year. It peaked at a new all-time high of $73,000 before profit takers took the price down 10 per cent. Gold gained 8.1 per cent to $2,214 an oz, ending the month at an all-time high. Markets are betting that central banks will not be as tough on inflation as they say. With high government debt, markets suspect that allowing inflation to run hotter is the path of least resistance to reducing the debt burden as a percentage of gross domestic product (GDP).
Commodities also benefited, with copper up 4.5 per cent to a 12-month high, aluminium up 4.6 per cent and platinum up 3.5 per cent. Oil was in demand, with Brent crude up 6.1 per cent to $87 per barrel – its highest since mid-October.
Continental European equity markets had a good month, with the Italian MIB up 6.7 per cent, the Dax up 4.7 per cent and the CAC up 3.6 per cent. In the UK, the FTSE All-Share (TR) Index gained 4.8 per cent, and it was nice to see the FTSE 250 close behind, up 4.6 per cent. The Aim All-Share remained lacklustre, up just 1 per cent. The Nikkei 225 was up 3 per cent, making it the best-performing primary index this year, up 21 per cent. For once, the US was nearer the bottom of the table. Due to the strength of the US economy, the market has pushed out expectations of the timing and extent of interest rate cuts. March's consumer price index (CPI) inflation released on 10 April was again higher than anticipated. Markets now only expect two interest rate cuts in the US this year. The Bank of England and the European Central Bank are likely to pre-empt the Federal Reserve by cutting rates in June.