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 lost more than 170 points on Wednesday after rising for five consecutive sessions as investors digested the latest Fed minutes while weak earnings and economic data weighed on sentiment. The S&P 500 retreated 0.7% and the Nasdaq shed 1.3%. Also, European equity markets snapped a 5-day winning streak yesterday, with the Euro Stoxx 50 retreating 1.3% as investors again became concerned about soaring inflation, rising interest rates and economic growth. 


  • Shares in Asia fell on Thursday, with the Nikkei retreating from a 7-month peak following reports that activist investor Elliott has sold almost all of its shares in Softbank Group. Stocks in China extended losses and those in Hong Kong traded in the red after Goldman Sachs and Nomura cut further their China’s GDP forecasts, citing weak July data and near-term energy issues. 
  • European equity futures nudged higher this morning while their US counterparts were mostly flat. 
  • Oil prices eased on Thursday, reversing course from the previous session, as rising output from Russia directed to Asian buyers and worries about a potential global recession weighed on the market. 
  • Federal Reserve officials maintained their hawkish view and were committed to getting inflation back to its 2% target, minutes from the July 26-27 meeting showed. Policymakers said that for the central bank to scale back its rate hikes, inflation reports due to be released before the next meeting would need to confirm that the pace of price growth was cooling. The minutes also noted that as the stance of monetary policy tightens further, at some point, it would likely become appropriate to slow the pace of policy rate increases and gauge the effects of such tightening on growth and inflation. 
  • Retail sales in the US unexpectedly stalled in July, disappointing markets that expected a 0.1% increase as inflation eased slightly but remained high. Sales at online retailers jumped 2.7%, boosted in large part by Amazon’s Prime Day event on July 12-13, but sales at fuel stations tumbled 1.8% as fuel prices dropped. 
  • The Eurozone quarterly economic growth was revised lower to 0.6% in Q2 from a preliminary estimate of 0.7%, and following a 0.5% rise in Q1. It is still the strongest performance in three quarters, prompted by the easing of Covid-19 restrictions and the summer tourism season in southern countries. However, the region’s outlook for the winter is expected to darken after the ECB started its tightening cycle as record inflation levels started reducing households’ purchasing power. 
  • The US and Taiwan have started formal negotiations on a bilateral trade initiative to deepen economic ties, a move likely to inflame already high tensions with China as Taipei looks to reduce its economic dependence on Beijing. The first round of trade talks is set to take place “early this fall,” the Office of the US Trade Representative said. 
  • Cisco issued fiscal fourth-quarter results on Wednesday that topped analysts’ projections and provided a better-than-expected forecast for the coming year. Shares rose about 4.5% in extended trading. 
  • Apple is aiming to hold a launch event on 7th September to unveil the iPhone 14 line, according to people with knowledge of the matter, rolling out the latest version of a product that generates more than half its sales.