The first quarter of 2022 has proved to be very difficult for markets. Speculation of aggressive interest rate rises was swiftly followed by the Russian invasion of Ukraine, leaving both bonds and equities struggling for return. The energy heavy FTSE 100 index is one of the few exceptions. A new wave of Omicron cases in China also weighed on Chinese markets. Reassurance from top economic policymakers helped address the acute concerns, leaving emerging markets flat on the month. Central banks in the west continue their tightening policy and the US Federal Reserve delivered its first interest rate hike since 2018. Markets shrugged off the increase in rates having “priced” faster rises in January already, and the back half of the month was generally positive for equities with most indices recovering some of the year-to-date losses. Conversely, rising rates offered no respite for bond markets which had their worst quarter since the liquidity led panic of the Covid pandemic. Looking forward, the short-term course of the war in Ukraine remains uncertain but harsh economic sanctions likely limit Russia’s ability to endure a long conflict. However, even a quick resolution leaves a high degree of uncertainty around second order effects.