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. 

The major US averages closed slightly lower in a seesaw session on Monday, with the Dow and Nasdaq Composite each falling 0.1%, while the S&P 500 was basically flat.  Healthcare stocks led the declines, while energy firms outperformed.  Meantime European markets remain closed on Monday for a banking holiday. 


  • Shares in Asia were mixed in Tuesday trade, as investors watched for market reaction to China’s central bank announcing financial support for Covid-hit sectors.  Hong Kong’s Hang Seng index led losses among the region’s major markets as it dropped around 1.8%, returning to trade following holidays on Friday and Monday.  Elsewhere, the Nikkei 225 in Japan, South Korea’s Kospi and the ASX 200 in Australia all climbed for the day.  
  • European stocks are on course for gains as US stock futures were firmly in the green in one of the busiest weeks of corporate earnings season. 
  • Oil prices rose on Tuesday as investors fretted over tight global supply after Libya was forced to halt some exports and as factories in Shanghai prepared to reopen post a Covid-19 shutdown, easing some demand worries. 
  • The World Bank has lowered its annual global growth forecast for 2022 by nearly a full percentage point, from 4.1% down to 3.2%, citing the pressure that Russia’s invasion of Ukraine has placed on the global economy.  The institution’s Chief Economist Carmen Reinhart said she wouldn’t rule out further downgrades to the growth outlook. 
  • The Chinese central bank pledged to boost financial support for the real economy by expanding the scale of loans and promoting exports.  Authorities will prioritize financial support for industries, businesses and people affected by Covid-19. 
  • Australia’s central bank is nearer to raising interest rates for the first time in more than a decade as inflation accelerates and a tightening labour market nudges wage growth higher, minutes of its April policy meeting showed on Tuesday. 
  • Ukranian President Volodymyr Zelenskiy said Russian forces had begun a new campaign to conquer the Donbas region in the east of his country.  Meanwhile, President Vladimir Putin asserted international sanctions have failed, citing the recovery in the ruble to prewar levels.  That, however came after Russia imposed tight capital controls. 
  • Federal Reserve Bank of St. Louis President James Bullard said the central bank needs to move quickly to raise interest rates to around 3.5% this year with multiple half-point hikes and that it shouldn’t rule out rate increases of 75 basis points. 
  • Investor confidence in China’s battered real estate market appears to be improving, as bond trading volumes and prices rose in recent weeks, in part boosted by the government’s promise to support the sector and some loosening of policies. 
  • Soaring fertilizer costs have rice farmers across Asia scaling back their use, a move that threatens harvests of a staple that feeds half of humanity and could lead to a full-blown food crisis if prices aren’t curbed.  From India to Vietnam and the Philippines, prices of crop nutrients crucial to boosting food production have doubled or tripled in the past year. 
  • Bank of America posted Q1 profit on Monday that exceeded analysts’ estimates, helped by the better-than-expected credit quality of its borrowers.  The bank nonetheless continued the latest trend of profit declines in the US banking sector as investment banking fees slumped 35% amid challenging markets and volatility but the lender still saw revenue gains across its main segments. 
  • China’s ride-sharing DiDi Global has set May 23 for a shareholder vote on its plans to delist from the New York Stock Exchange over concerns expressed by Chinese regulators that is operations were leaking sensitive data.