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. 

European markets are heading for a higher open on Tuesday, having traded in mixed territory on Monday as they struggled to build on positive momentum seen at the end of last week. Elsewhere, U.S. stock futures were flat on Monday night after all three major averages gained during the daily trading session. Asia-Pacific shares were mixed ahead of economic data from Japan and India. Mainland China markets thrived. The Shanghai Composite gained 0.37% and the Shenzhen Component was up 0.491%. Hong Kong’s Hang Seng index was also up 0.07%. Japan’s Nikkei 225, however, fell 0.13% while the Topix index dipped 0.19%. The Kospi traded better, rising 0.3%. 


  • European shares extended gains for the fourth session in a row on Monday, with the regional STOXX 600 adding roughly 0.3% to finish above 440, as gains in the utility sector offset losses in energy. 
  • On the corporate side, Telecom Italia jumped over 5% to lead the STOXX 600 on headlines suggesting that Italy’s far-right Brothers of Italy party, which is leading in polls, may take the phone company private. Domestically, the benchmark DAX 40 added 0.2% to around 13,817. 
  • US stocks bounced back from a lower open on Monday, handing the Dow its longest run of gains since late May, as investors looked past soft data out of China and US data that missed forecasts.  
  • US stock futures drifted lower on Tuesday after the major averages posted gains in the last regular session, while investors braced for retail earnings that could offer clues about consumer activity and the overall In regular trading on Monday, the Dow rose 0.45%, the S&P 500 gained 0.40% and the Nasdaq Composite added 0.62%. Those moves came as investors shrugged off dismal economic data from China and the US and remained focused on easing price pressures. 
  • Stocks in Asia resisted mounting signs of a sharp economic slowdown that are weighing on bond yields and commodity prices, a schism underlining some of the tension in global markets. 
  • Oil declined for a third day as a deepening global slowdown looked set to coincide with an increase in supply from OPEC producers. 
  • Gold steadied after the biggest drop in a month as investors flocked to the dollar amid growing signs of an economic slowdown. 
  • China 10 Year Government Bond Yield decreased to a 26-month low of 2.659%, amid mounting concerns over the country’s economic outlook, Covid-19 curbs, an ongoing property crisis, and as a divergent monetary policy between the PBoC and the Fed is pushing US Treasury yields higher and making Chinese bonds less attractive to investors. Chinese debt witnessed outflows of about $3 billion in July, according to IIF estimates, which would mark the sixth consecutive month of foreign outflows.