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 globalization and further fuel higher structural inflation. 

Major US stock indices ended last week in green, marking their best performances in 2022, supported by strong earnings from tech giants like Apple and Amazon. The Dow added 0.97%, the S&P 500 climbed 1.42% and the Nasdaq advanced 1.88%. Also, investors’ fears about the Fed’s aggressive rate-hiking pace waned after the US economy unexpectedly contracted for the second straight quarter. On the week, the Dow rose 2.96%, the S&P 500 4.27% and the Nasdaq 4.7%. European equity markets also extended gains for a third session on Friday, with the Euro Stoxx 50 finishing at an over seven-week high and recording its best monthly performance since November 2020. 


  • Shares in Asia were broadly higher this morning, with the Nikkei 225 and Australia’s ASX 200 leading the gains, with an advance of over 0.60% each. Mainland China shares also rose as data showed service sector activity in the country continued to expand despite a slowdown in manufacturing. 
  • European equity futures are lower with US contracts, suggesting a recent rebound in global equities could pause. 
  • Oil prices fell on Monday after declining for two straight months, as a weakening global demand outlook outweighed signs of ongoing supply tightness. Markets look ahead to an OPEC+ meeting on Wednesday where it is expected to stick to its policy of modest supply increases amid capacity constraints and underinvestment in oil fields, keeping the global supply tight. 
  • The Caixin China General Manufacturing PMI fell to 50.4 in July from June’s 13-month high of 51.7, missing market forecasts of 51.5. While signalling a back-to-back rise in factory activity, the latest print reflected widespread Covid lockdowns and electricity shortages at some firms.  
  • Federal Reserve Bank of Minneapolis President Neel Kashkari said the central bank is committed to doing what’s necessary to bring down demand in order to reach policy makers’ 2% long-term inflation goal, a target that remains far off. Inflation that has continued to exceed the Fed’s expectations is “very concerning,” Kashkari said. 
  • HSBC Holdings plc reported a 15% drop in first-half profit as expected credit losses more than offset the impact from rising net interest income at Europe’s biggest bank. In the meantime, the group said a demerger or spinoff of its Asian business risks huge one-off execution costs, higher taxes and ongoing running costs for the bank, in its most detailed rebuttal yet to calls from its largest shareholder to break up the bank. 
  • Erste Group Bank said this morning that its first half profit grew as it took advantage of increasing net interest income on the back of a solid loan growth. It kept its full-year guidance for double-digit return on tangible equity, though its outlook was based on the assumption that its core markets could import adequate quantities of gas from Russia this year. 
  • Heineken posted higher-than-expected first-half earnings on Monday as consumers bought more beer despite inflationary pressures, but the company dropped its margin target for 2023 due to higher costs.