In our regular market round-up, we take a look at what's happened in Q1 2021.

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COVID-19 vaccine rollouts and the passage of further huge US fiscal stimulus significantly boosted expectations of economic recovery. Government bond yields and equity prices rose over the quarter, reflecting improvement in the economic outlook. 

Some of the headlines in Q1 2021 include:

• Q4 GDP releases confirm the economic recovery slowed in the last quarter of 2020. Resurgence in COVID-19 infection rates and slower than hoped for vaccine rollouts in many parts of the world suggest global growth in Q1 2021 will be even weaker.
• The global composite Purchasing Managers’ Indices (PMIs) rose once more and remain at a level signalling expansion. However, the ostensibly positive impact on manufacturing PMIs from surging input prices, at least partly, reflects supply chain disruptions.
• While realised inflation has remained subdued (UK headline CPI inflation unexpectedly fell to 0.4% year-on-year in February) a resumption of activity and deferred consumption alongside rising oil prices are expected to lead to higher inflation in the short-term.
• Despite slipping towards the end of the period, oil prices rose 22.4% in the first quarter to $64 per barrel, while the dollar spot price of gold slipped 10.2% as bond yields rose. 

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