April Market Commentary

April Market Commentary by Upper Park Trading Limited – A Thornbridge Appointed Representative

This month’s market commentary has been produced by Upper Park Trading Limited, a Thornbridge Appointed Representative. It looks back on a turbulent month, marked by the US, Trump and tariffs. 

President Trump unveiled much higher-than-expected tariffs on April 2nd, triggering significant uncertainty and volatility. Global stock markets all fell sharply, as recession fears spiked, the dollar fell and bond yields rose in a rare positive correlation. Shorter term yields fell. China matched the tariffs, triggering a further escalation, while other countries were more circumspect. As the month progressed, the dollar and short term yields remained broadly lower, while global equity markets retraced their losses. Bonds stabilised, and steeper curves remain.

While the broad architecture of the new global trading framework desired by the US is better understood by market participants now, it remains unclear how far counterparts are prepared to shift in order to accommodate it. The tactics deployed by Trump to first change the scale of the conversation by an order of magnitude and then to negotiate afterwards, have allowed a wide variety of narratives to prevail, causing overseas holders of US assets to reduce exposure markedly.

Fears and narratives in the marketplace were dominant, while policy statements were often more guidelines and musings, than clear steers. Central banks abroad do seem inclined to pursue a lower rate path than previously envisaged, but fearful of supply chain congestions, and short term inflation considerations, seem reticent to accelerate too fast. Markets are ahead of the central banks, such that central bank policy comments are seen as only catching up with existing pricing. Volatility was discontinuous frequently spiking on expected Trump announcements moving prices several standard deviations, forcing much smaller positions at all times, for risk management purposes. Given that many of these allowed for risks didn’t then materialise during the life of a trade, delivered returns per trade were very low, and deployment of capital was a long way below targeted track. Even so, losses were frequently incurred too, as narrative shifts sometimes driven by policymakers themselves, would quickly shift the balance of risk reward, triggering an exit.

Looking ahead, there is some reason to be more optimistic for more amenable and fertile trading conditions. As US Treasury Secretary Bessent has said, the “aperture” of uncertainty about tariffs will narrow as time passes and trade deals are done, and presumably, as industry and supply chains adapt to the new reality. ” The path is going to be worth it when we get there, and for the short term I think everyone should take a deep breath”.

– Upper Park Trading Limited