RadexMarkets: Technical rebound coexists with macroeconomic pressures

April 1, RadexMarkets said that as the market gradually absorbs the shock from geopolitical conflicts, global risk assets have shown signs of a temporary rebound amid the turbulence. After experiencing a stretch of volatility, the stock market has seen some recovery, while energy prices continue to stay at high levels, reflecting that the tight supply-and-demand situation has not yet eased noticeably. Relevant developments indicate that market sentiment keeps swinging back and forth between pessimism and cautious optimism; on one hand, uncertainty stemming from the conflict remains, and on the other, expectations that the situation may improve are also supporting a rebound in short-term risk appetite.

From the perspective of driving factors, RadexMarkets believes that the core of current market volatility still centers on energy and inflation expectations. Oil prices have continued to rise due to supply disruptions, directly pushing up global inflation while also heightening concerns about slower economic growth. In this environment, after bond yields rose at one point, they subsequently pulled back, reflecting funds continuously switching between risk assets and safe-haven assets. Some market views hold that if energy prices remain elevated, major central banks may be forced to maintain a relatively tight policy stance, which would weigh on risk assets.

Further observation shows that the market rebound is more of a technical repair rather than a trend reversal. The previous consecutive declines pushed some assets into oversold territory, and combined with short-term positive news, it drove funds back in. However, overall, macro uncertainty has not improved significantly, especially since energy supply issues remain an important variable affecting the global economy. At the same time, investors remain cautious about future growth prospects, and higher volatility still accompanies the rebound.

In terms of cross-asset linkages, rising energy prices not only lift inflation expectations but also indirectly affect the path of monetary policy and capital flows. Some funds have started to reallocate to safe-haven assets to hedge potential risks. Gold and other precious metals prices strengthen in tandem, reflecting increased demand for risk defense, while currency markets also show volatility, indicating that capital has been readjusting its allocation structure across the globe.

Overall, RadexMarkets believes that the current market remains in an unstable stage, and that short-term rebounds are driven more by sentiment and technical factors; the sustainability still needs to be watched. If energy supply disruptions continue to exist, the contradictions between inflation and growth may further intensify, thereby limiting the upside room for risk assets. Against this backdrop, the market may continue its choppy range-bound pattern, and investors should keep an eye on the knock-on effects caused by changes in macro variables, while maintaining an appropriate allocation to safe-haven assets.

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