March 2022 Newsletter and Market Commentary

Please find below the March market commentary for Q1 2022, including our global macroeconomic outlook and recent relevant headlines.

Market Commentary from Mark Witten, CIO

Investors are facing a rising number of daunting challenges. These include the energy and fertiliser price shock from the Ukraine conflict, accelerating deglobalisation as the Emerging Markets led by BRICS split from the Developed World, tightening central banks combined with contracting US fiscal policy, and the probability of fresh socio-political instability globally driven by higher food prices and the resulting poverty and discontent. Together, these forces are fuelling inflation rates that are already the highest in a generation.

This all suggests a global economy in danger of shifting from the excess liquidity-driven inflationary boom of the last two years to an inflationary bust that triggers a global recession. This does not bode well for traditional assets

The recent crypto asset market correction that started in November was around -55% from peak-to-trough and was driven by macro-economic and geopolitical tensions. This was unlike the previous -61% correction in May through July  2021 that was driven by crypto-specific factors, most notably China’s banning of the BTC miners and regulatory uncertainty in the USA. The market has since consolidated and stabilised since mid-February and investors are once again focusing on the very positive fundamental outlook for cryptocurrencies and digital assets (“crypto assets”) as evidenced by the news flow we highlight below.

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