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. 

The Dow Jones added 27 points on Thursday, extending gains for the second straight session. The S&P 500 closed slightly below the flatline after touching a 3-month high earlier in the session and the Nasdaq reversed gains to end 0.6% lower as investors reassessed the outlook for monetary policy and tech traders took advantage of this week’s rally. In Europe, the Euro Stoxx 50 rose 0.2%, as sentiment was supported by expectations the Fed will slow the pace of rate hikes as inflation in the US fell more than anticipated last month. 


  • Asian markets were mixed on Friday following strong gains in the previous session with Japanese shares leading the gains, following a return to trade after Thursday’s holiday.  
  • European shares are on course for a flat start while US futures are seen steady after a lacklustre session on Thursday. 
  • Oil prices were steady on Friday, with WTI crude standing near $94 a barrel while Brent oil was around $99, amid contrasting views from OPEC and the IEA on the 2022 global demand forecast. For the week oil is set to jump near 5% as recession fears ease. 
  • The IEA raised its oil demand estimate for 2022, citing higher natural gas and electricity prices will lead to more gas-to-oil switching and forecast a near 20% drop in Russia’s oil output by the start of next year when the EU ban takes effect. In contrast, OPEC lowered its global oil demand forecast for 2022 to 3.1 mn bpd compared to 3.36 mn bpd. 
  • Producer prices in the US unexpectedly fell 0.5% month-over-month in July, following a downwardly revised 1% rise in June and beating market forecasts of a 0.2% increase. It is the first decline in the PPI in over two years, mostly due to a 16.7% drop in fuel prices. On an annual basis, producer inflation fell to 9.8%, the lowest since October and compared to forecasts of 10.4%. 
  • The UK economy contracted in the second quarter, as the country’s cost-of-living crisis hit home. Official figures showed that gross domestic product (GDP) shrunk by 0.1% quarter-on-quarter in Q2, less than the 0.3% contractions expected by analysts. It comes after GDP expanded by 0.8% in Q1. 
  • President Joe Biden is preparing to launch his re-election bid in the months after November’s midterm congressional elections, according to multiple aides and allies, setting up a potential 2024 re-match with former President Donald Trump. 
  • The Rhine River today is set to shrivel to below 40cm, which could upend the trade of fuels throughout Europe, with the effects potentially rippling through the continent for months. The Rhine is used to ship everything from fuels to chemicals, paper products to grains. 
  • Sanofi, GlaxoSmithKline and Haleon have lost a combined $40 bn in market value since Tuesday’s close amid mounting concerns about litigation around the recalled heartburn drug Zantac. Zantac was a once-popular antacid that had drawn a flurry of US personal-injury lawsuits alleging it causes cancer. The drugmakers are accused in the lawsuits of failing to properly warn users about health risks. While news of the litigation is not new, the publication of a series of analyst notes in recent days highlighting the potential exposure the companies face awoke investors to the risks.