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D-PIMS weekly market update - week of 21st to 27th March 2022

Today’s Monday update:

Over the course of last week, market moving headlines were mostly related to the invasion of Ukraine and Covid-19:

• On Monday, Ukraine defied a Russian demand that its forces lay down arms before dawn in Mariupol, where hundreds of thousands of civilians have been trapped in a city under siege and which is already laid to waste by Russian bombardment. "There can be no question of any surrender, laying down of arms" in the city, Ukrainian Deputy Prime Minister Iryna Vereshchuk responded. "We have already informed the Russian side about this."

Israeli Prime Minister Naftali Bennett, who has been trying to mediate an end to the Ukraine-Russia conflict, said on Monday that despite some progress, big gaps remained between the sides.

The Kremlin said on Monday that peace talks between Russia and Ukraine had not yet made any significant progress. Moscow has accused Kyiv of stalling peace talks by making proposals unacceptable for Russia. Ukraine has said it is willing to negotiate but will not surrender or accept Russian ultimatums.

• On Tuesday, it was announced that top trade officials from the United States and Britain will meet in Scotland in April after two days of talks in the U.S. port city of Baltimore on forging deeper and more inclusive trade relations, and a surprise deal on cutting tariffs. Trade minister Anne-Marie Trevelyan told reporters on Tuesday the meetings had energized efforts by the two historic allies to work together more closely and "stay ahead of the game in a fast-changing global economy."

• On Wednesday, China's top economic planner announced a target to produce up to 200,000 tonnes per year of green hydrogen, a zero-carbon fuel generated from renewable energy sources by 2025, but envisions a more widespread industry over the long term. China, the world's largest emitter of greenhouse gases, has been striving to balance energy security and achieve its climate change goals, and is focusing on hydrogen to reduce carbon emissions from its transportation and industrial sectors.

British inflation shot up faster than expected last month to hit a new 30-year high. The Office for National Statistics said consumer prices rose by 6.2% year-on-year in February after a 5.5% rise in January, its highest rate since March 1992.

The Chancellor, Rishi Sunak, cut taxes for workers and reduced a duty on fuel on Wednesday, as he sought to soften a severe cost-of-living squeeze against the backdrop of fast-rising inflation and slowing economic growth. Announcing a half-yearly budget update in Parliament, Sunak said he was increasing the threshold at which workers start to pay national insurance, or social security contributions by £3,000 this year. He also announced a reduction of one pence in the pound in the basic rate of income tax in 2024, while a cut in fuel duty of 5 pence per litre would start later on Wednesday and last until March next year.

• On Thursday, Western leaders meeting in Brussels agreed to strengthen their forces in Eastern Europe and increase military aid to Ukraine as the Russian assault on its neighbour entered its second month.

• Britain said on Friday, that Ukrainian troops are recapturing towns east of the capital Kyiv and Russian forces who had been trying to seize the city are falling back on their overextended supply lines

In the first big sign that Western sanctions on Russia were impacting investment from China, sources told Reuters that state-run Sinopec Group, Asia's biggest oil refiner, had suspended talks on a petrochemical investment and a venture to market Russian gas.

Moscow signalled on Friday it was scaling back its ambitions in Ukraine to focus on territory claimed by Russian-backed separatists as Ukrainian forces went on the offensive, recapturing towns on the outskirts of the capital Kyiv. In an announcement that appeared to indicate more limited goals, the Russian Defence Ministry said a first phase of its operation was complete and it would now focus on two eastern regions claimed by Russian-backed separatists.

• Over the week, the main Global Stock markets were mixed with some up and some down. Over the week, all of the D-PIMS portfolios were well up, especially the higher risk portfolios. They were helped by their Japan and technology allocations.

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Past Performance is no guarantee of, or guide to future returns.

The comments made in this email represent our current investment views and are in no way a guarantee of future performance.