Brent crude falls back towards $82 over worries higher interest rates will dampen global economic growth and future energy demand, meanwhile, equity investors are unsettled as concerns about the repercussions of more rate hikes grow with a muted session expected in Europe.

Equity trading is lacklustre and oil prices have continued their descent downwards as more worries bubble up about the strength of the global economy and economies brace for further rate hikes from central banks.

Concerns are colliding about stubbornly high inflation in Europe, expectations of a US recession and this week’s weaker-than-expected data on investment in the beleaguered property sector in China.

The picture being painted is of more struggles for the global economy ahead and weaker demand for energy.

Brent crude has dipped 3.5% since Monday and is hovering just above $82, with the effect of OPEC+ cuts to production evaporating.

The stronger dollar amid expectations that the Federal Reserve will have to keep ramping up rates higher to keep high inflation in check, is also a drag on demand as it makes the commodity more expensive in other countries.

Data from Japan showing that exports grew more than expected in March failed to significantly lift the mood of the markets, which isn’t surprising given that the rise didn’t stop the trade deficit from widening further.

It hit a record $160 billion in March due to the onerous effect of higher energy costs and a growth in imports.

After a stagnant session on Wall Street and a mixed bag of trading in Asia, a muted start to trading is expected in Europe, with investors still concerned about scorching inflation and mulling just how many rate rises will be needed to bring it down.

Although the cost-of-living crisis is still swirling, it’s not putting people off from sprucing up their living and garden spaces with splashes of new furnishings and decorations.

Dunelm said it’s still expecting pre-tax profit to be in line with previous expectations, reporting a sales uplift of 6% for the third quarter compared to the same period last year.

Shoppers are showing an appetite for bargains, with the Winter sale a big draw but what’s encouraging is that there was also interest in new Spring ranges, showing that the company is not having to consistently offer discounts to draw shoppers in, with gross margins for the full year expected to remain at 50%.

Dunelm is well positioned with a keen eye on value and is showing hardiness amid inflationary headwinds. While big-ticket items like sofas may have been scratched off lists, it seems there is still demand for a scatter of new cushions in lounges or on patios.

Garden decorations appear to be the trend of the moment, particularly the new sustainable ranges, under the conscious choice brand.

WH Smith is benefitting from the snap back in travel with its outlets across train and airport networks much busier as demand for trips and holidays has rebounded.

The pandemic hit the retailer hard, as trade evaporated while people stayed at home but now the shutters are well and truly up and it’s back to brisk business, with half-year pre-tax profit of £45 million, beating expectations.

Even the widespread rail strikes couldn’t blow the company off course, with surging demand at airports, offsetting the impact of delayed train journeys.

The pent-up demand for travel is showing up in these figures, with passengers clearly reserving cash to treat themselves to books, magazines and snacks on their long-awaited leisure trips.

Market Report by Susannah Streeter, Head of Money and Markets at Hargreaves Lansdown.