April was no improvement on the first quarter of the year. The war in Ukraine, lockdowns in China and the prospect of substantially tighter US monetary policy all weighed on sentiment. Global equities continued their recent decline. The commodity-heavy FTSE All-Share was the winner through April, with a positively flat return. Conversely, growth stocks saw further heavy losses. Fixed income also came under pressure, with global bonds coming off further in April as US 10-year Treasury yields approached 3%. Expectations for the path of monetary policy have seen a major shift this year, with markets now pricing in interest rates of well over 2% in both the US and the UK by year-end, while eurozone rates are expected to move into positive territory as early as October. Central bankers face substantial challenges as they look to tighten policy to help bring inflation back down to target without tipping the economy into recession. Against this backdrop, there is potential for further pressure on equity valuations ahead. Companies that can maintain healthy margins due to strong pricing power will likely be relative outperformers. In fixed income, the case for owning duration is stronger than it was at the start of 2022, but yields may still rise further as central banks push ahead with their tightening plans.