Despite US shares rallying for a third straight week, US stocks finished the first quarter of 2022 lower as the war in Ukraine forced central banks to become more hawkish to combat higher inflation amid simmering growth concerns.

There were no such problems for the ASX200, which rallied over 6.5 per cent in March, its largest one-month gain since the US presidential election in November 2020.

Although much of the focus has been on the strong performance of the ASX200’s materials and energy sectors, the financial sector had a monster month in March, up over 13.5 per cent from its March 7 lows.

Here are the top five things that happened in markets this week.

1. Optimism fades over Ukraine – Russian peace talks

Just a day after Moscow and Kyiv reported peace talks in Istanbul had been productive and Russia claimed it would pare back activities in Kyiv and Chernihiv, Russian forces continued to attack the outskirts of Kyiv, denting hopes of a peace agreement.

2. Australian federal budget

The faster economic recovery from the pandemic and higher commodity prices allowed the Treasurer to announce both more spending and lower budget deficits.

The deficit for 2021-22 was revised lower to $79.8 billion, an improvement of $19.4 billion on MYEFO in December.

The announced spending measures include “cost of living” payments, a temporary cut to fuel excise, extra spending on infrastructure and defence, and more help for home buyers.

3. Bitcoin prints fresh highs for 2022

Bitcoin traded above $48,000 for the first time this year.

It was supported by a rally in stocks – Bitcoin remains a risk asset – and comments made last week by Pavel Zavalny, the head of the Russian State Duma Committee on Energy who said Russia could accept Bitcoin as payment for the country’s oil and gas resources.

4. USDJPY goes Vertical

USDJPY traded above 125 for the first time since August 2015 and despite a subsequent pullback to below 122, USDJPY still gained about 6.5 per cent for March.

This is its largest monthly rise since Donald Trump’s victory over Hillary Clinton in the 2016 US presidential election.

5. German inflation surges to record highs

German headline inflation surged by a record 7.6 per cent year on year in March, up from 5.1 per cent year on year in December.

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All trading carries risk. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.