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. 

US equities rallied on Wednesday, with the Dow rallying 1.6%, the S&P 500 adding 2.1% to its highest since early May and the Nasdaq climbing 2.8% as investors cheered a softer-than-expected reading on inflation that raised expectations the Federal Reserve may start to slow the pace of monetary tightening. Elsewhere, European bourses also rebounded sharply yesterday, with the Euro Stoxx 50 adding 0.9%, to finish at its highest level in two months. 


  • Asian shares were higher on Thursday with the ASX trading at over a 2-month peak, with all sectors moving higher. The Hang Seng and the Shanghai Composite also rose as the PBoC said it would balance economic growth and price stability. Markets in Japan were closed for a holiday. 
  • European equities are poised to gain alongside their global counterparts after the US inflation print curbed bets for aggressive Fed hikes. 
  • Oil prices drifted lower this morning after official data showed that US crude inventories rose much more than expected as local output increased, while crude flows at a key European pipeline normalised. 
  • The annual inflation rate in the US slowed more than expected to 8.5% in July from an over 40-year high of 9.1% hit in June, and below forecasts of 8.7%. Compared to the previous month the CPI was unchanged, after rising 1.3%, and also below expectations of 0.2%. Also, core inflation was steady at 5.9%, beating forecasts of 6.1%, and offering some support that inflation has finally peaked. 
  • Several Fed officials reacted to the inflation data by emphasising the central bank’s commitment to keep raising rates to convincingly tame inflation. San Francisco Fed President Mary Daly warned that it is too early to “declare victory” in the fight against inflation, and that consumer prices remain “far too high and not near out price stability goal.” Minneapolis Fed President Neel Kashkari also said he expects the central bank to raise its policy rate to 3.9% by year-end and to 4.4% by end of 2023, while Chicago Fed President Charles Evans indicated that US rates will top out at 4% next year. 
  • Russia resumed oil flows through a pipeline to central Europe after Hungary stepped in to resolve a tussle over the payment of a transit fee, easing fears of a supply crunch in the region. The transit fee payment agreement covers only flows to Slovakia and Hungary, not the Czech Republic. 
  • The Rhine River is set to become virtually impassable at a key waypoint in Germany as shallow water chokes off shipments of energy products and other industrial commodities along one of Europe’s most important waterways. The marker at Kaub, west of Frankfurt, is forecast to drop to the critical depth of 40 cm tomorrow, making most barges effectively unable to transit the river.  
  • Siemens reported better-than-expected revenues for its third quarter early this morning as a write-down at Siemens Energy pushed the group into the red for the first time in nearly 12 years. The loss meant Siemens had to cut its full year earnings per share guidance to a range of €5.33 to €5.73, from €8.70 to €9.10 previously.  
  • Deutsche Telekom on Thursday posted an increase in first-half profit that was almost double that registered in the year-ago period, thanks to a 6.1% growth in revenue and the positive impact of exchange rate effects in its US operating segment. As a consequence, the company also lifted its outlook for the year. 
  • Disney reported yesterday a higher-than-expected growth in subscriber numbers, as the company beat on both the top and bottom line. The company also announced a price rise on ad-free Disney+ of 38% to $10.99 as part of a new pricing structure for streaming services.  
  • SoftBank yesterday announced that it will book a gain of just over $34 bn by selling part of its stake in Alibaba. SoftBank will cut its holding to under 15%, from almost 24% now.