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 Wednesday, with steep declines in tech and other growth stocks, after minutes from the Federal Reserve’s March meeting sharpened investors’ focus on the US central bank’s plans to fight inflation.  The Nasdaq logged a decline of over 2% for a second straight day, while the Dow Jones and the S&P 500 were down 0.4% and 1.0%, respectively.  Major European bourses also closed in negative territory, amid fears over the economic impact of fresh sanctions against Russia. 


  • Major markets in Asia followed Wall Street lower this morning, with the Nikkei sinking nearly 2% after the IMF cut Japan’s 2022 GDP forecast to 2.4% from an earlier projection of 3.3% due to an expected contraction in Q1 and the impact of the Ukraine war.  Stocks in China, Hong Kong and South Korea plunged between 1% to 1.5%, while those in Australia extended the fall. 
  • European equity futures are edging lower this morning, similar to their US counterparts. 
  • Oil markets were higher this morning, recouping some losses after tumbling more than 5% in yesterday’s session, as traders reassessed news that consuming nations will release a huge amount of oil from strategic reserves to offset supply lost from Russia. 
  • Federal Reserve officials laid out a long-awaited plan to shrink their balance sheet by more than $1 trillion a year while raising interest rates “expeditiously” to counter the hottest inflation in four decades.  Minutes of their March meeting, showed officials debated going bigger in terms of raising rates but chose caution in light of the uncertainty caused by Russia’s invasion of Ukraine. 
  • US Treasury Secretary Janet Yellen cautioned Wednesday that Russia’s attack on Ukraine could cause a major bit to the global economy. 
  • The US will impose new sanctions on Russia, including penalties on two of its largest banks, Sberbank and Alfa Bank, and President Vladimir Putin’s daughters.  Meanwhile, the UK banned all new outward investment in Russia and froze the assets of Sberbank.  The UK will also end all imports of Russian coal and oil by the end of 2022 and sanction another eight wealthy Russians. 
  • Samsung Electronics reported this morning an estimated 50% jump in quarterly operating earnings to post its highest first-quarter profit since 2018, beating expectations as solid demand underpinned prices for memory chips. 
  • Berkshire Hathaway bought a stake in HP valued at more than $4.2 billion in multiple transactions earlier this week and now holds an investment of about 121 million shares in the computer company.