The war in Ukraine has tended to increase uncertainty regarding inflation and growth prospects.  When and with what consequences this war will end is pure speculation, but capital markets are expected to build a certain immunity to the headline risks in the coming weeks.  The medium- to long-term consequences, on the other hand, could be significant.  It is possible that we are at the beginning of a new bloc formation or a new Cold War.  This would put a significant damper on globalisation and further fuel higher structural inflation. 

Wall Street’s main indices fell on Tuesday, dragged by weakness in tech and other growth stocks, after comments from Federal Reserve Governor Lael Brainard spooked investors about potential aggressive actions by the central bank to control inflation.  The Nasdaq posted its biggest daily percentage drop in about a month, while the Dow Jones and S&P 500 fell by 0.8% and 1.26%, respectively.  Meanwhile, European markets ended mixed. 


  • The Asian market was dragged lower by technology stocks on Wednesday mirroring losses seen among their peers on Wall Street. 
  • European stocks are on track for declines while US stock futures were steady this morning. 
  • Oil prices were mixed early morning, recovering from early losses, as the threat of new sanctions on Russia raised supply concerns, countering fears of weaker demand following a build in US crude stockpiles and Shanghai’s extended lockdown. 
  • China services activity slumped to 42.0 in March from 50.2 in February, pointing to the first drop in 7 months amid Covid-19 outbreaks and mobility curbs.  The latest print was also the sharpest fall in the sector since February 2020, as new orders shrank the most in 2 years and export sales fell at the steepest rate since October 2020. 
  • The US, EU and G7 are coordinating on a fresh round of sanctions on Russia, including a US ban on investment in the country and an EU ban on coal imports.  That follows allegations of civilian murders and other atrocities in Ukranian towns abandoned by retreating Russian forces. 
  • Federal Reserve Governor Lael Brainard called the task of reducing inflation pressures “paramount” and said the central bank will raise interest rates steadily whiles tarting balance sheet reduction as soon as next month. 
  • The ISM Services PMI for the US increased to 58.3 in March from 56.5 in February, due to easing pandemic restrictions although rising costs, logistical challenges and supply strains persisted.  Figures compare with market forecasts of 58.4. 
  • Twitter appointed Elon Musk to its board after the latter disclosed a minority stake in the social media giant and subsequently indicated he would target “significant improvements” to the social media platform. 
  • Carnival reported that the week of March 28 was its highest booking week in its history.  The company highlighted a double-digit rise during the week versus its prior record 7-day booking total, with 22 of its 23 ships now back in guest operations.  Carnival also said it anticipates more capacity sailing by year end 2022 than it sailed in 2019. 
  • Renault is considering separating its electric vehicles operations and assets from its Mobilise car-sharing unit into a new company, to be called New Mobility.  The company’s CEO Luca de Meo said an IPO of the new entity could be launched in 2023 and said the legacy assets could be combined with those of a potential partner.