Financial markets staged an impressive recovery in April, but remain well below their February highs. The Australian market rose 8.8% to now be 25% higher than its low on March 23rd. The US market was even more impressive especially in the technology sector, which advanced 15.4% for the month as many tech companies are seen as winners in the new COVID digital economy. Microsoft shares have jumped 17 per cent and Amazon has soared 28 per cent since the start of the year. The April recovery was driven by a number of factors including bargain hunting following the sharp falls in March, the positive impact of liquidity support measures and growing optimism that the virus is beginning to be controlled which will allow a gradual reopening of the global economy. Volatility remains high, which indicates markets are still searching for equilibrium in a highly contrived economic environment. Interest rates remain at historic lows and the financial system is being flooded with an extraordinary level of liquidity as Central Banks continue to print money to buy an expanding range of financial instruments including government bonds, mortgage backed securities and even corporate bonds in the US and Real Estate Investment Trusts in Japan. Governments continue to use deficit spending to assist businesses and individuals remain solvent during the enforced shutdown, but in the process are racking up an enormous level of debt. The “risk on” sentiment saw the AUD rally strongly back from its recent lows of around US57c to finish near US65c.