Market Update - Month Overview (April 2025)

Summarised by Shara Cox (Report via Zenith)

International Market Summary

Global share markets faced notable volatility in April, largely driven by escalating trade tensions from the US. Early in the month, the US administration announced steep new tariffs—including a headline 145% tariff on Chinese imports—which sparked fears of a global recession. However, markets recovered somewhat after a partial softening of this stance, with a 90-day pause and exemptions announced later in the month. The net effect was a lower-than-feared average tariff rate of around 15%.

US economic data reflected these tensions. GDP for the March quarter contracted by 0.3%, primarily due to a surge in imports ahead of the tariffs, although underlying domestic demand remained resilient. Inflation data showed some easing, with the core PCE index falling to 2.6% annually. European equities outperformed the US due to more accommodative fiscal policies and lower inflation. Meanwhile, emerging markets posted modest gains, with Latin American countries outperforming as China lagged.

Currency markets were highly reactive to the tariff developments, with global investors reducing USD exposure. The euro, yen, and Australian dollar all appreciated, while bond markets experienced volatility due to shifting inflation expectations and forced selling. Gold surged as investors sought safe havens, while oil fell sharply on weaker demand outlooks and increased OPEC supply.

Australian Market Summary

The Australian market stood out in April, outperforming most global markets. The ASX rose 3.6%, supported by a relatively low direct exposure to the US tariffs and a more stable domestic environment. One of the key tailwinds was Australia’s improving inflation outlook. Headline inflation came in at 2.4% for the March quarter, with core inflation returning to the RBA’s target band for the first time since 2021. This has opened the door for possible interest rate cuts later in the year.

Australian bonds gained ground, with yields falling as investor expectations shifted toward a more dovish Reserve Bank of Australia. Australian REITs rebounded strongly, up over 6%, following a period of underperformance, while the broader property and infrastructure sectors remained resilient.

The Australian dollar appreciated by 2.5% against the US dollar, driven by a flight away from US-denominated assets and more optimistic domestic economic data. Commodities were mixed—gold rose significantly in local terms, while oil prices declined sharply due to global oversupply and weaker demand signals.

Overall, Australia's relative insulation from the direct impacts of US tariff policy, combined with improving inflation data and resilient equity performance, positioned it as a global outperformer in an otherwise unsettled month for markets.