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 over 100 points to consolidate in negative territory on Tuesday and is on track to fall for the third session amid intensifying concerns of a recession induced by aggressively tight monetary conditions. In the meantime, the S&P 500 and the Nasdaq pared early losses to hover close to the flatline. Elsewhere, European equity markets also extended losses into a third session yesterday, with the benchmark Euro Stoxx 50 down 0.2%, dragged by healthcare and media shares. On the other hand, energy-related shares outperformed the trend and closed higher as crude prices surged by more than 3%, supported by tighter global supplies. 


  • Asian equity markets mainly fell on Wednesday, with losses primarily concentrated in mainland China and Hong Kong. Bucking the negative trend were markets in Australia and South Korea, which registered modest gains.  
  • European equities were heading for a lower open following weak US equity futures, as outlooks for the Federal Reserve and the global economy weighed on investors. 
  • Oil prices held gains on Wednesday after industry data signalled a larger-than-expected drop in US crude stockpiles. Both contracts surged over 4% Tuesday after Saudi Arabia flagged possible production cuts to stabilise the volatile futures market and as Kazakh oil exports may be disrupted for months due to damaged moorings. 
  • Euro-area businesses spent years wishing for a weaker euro. Now it’s here and it couldn’t have come at a worse time. The currency has slid more than 12% against the dollar this year, taking it below parity for the first time in two decades. That decline is boosting import costs, compounding a damaging surge in energy prices and a record inflation spike ripping through the economy. 
  • Minneapolis Federal Reserve Bank President Neel Kashkari was the latest official to reiterate the Fed’s focus on controlling inflation ahead of all else, and said on Tuesday his biggest fear was underestimating the extent of price pressures. 
  • Ukraine will today mark two key dates: 31 years of independence from the Soviet Union and six months of war waged by Russia. There’s a sense of fear hanging over the independence anniversary as Ukrainian and US officials have warned that Russia might use the day for a show of force. 
  • A whistle-blower complaint from Twitter’s former head of security claiming severe shortcomings in the social media company’s handling of users’ personal data will have wide ramifications for the business. US lawmakers voted to investigate, and the legal team for Elon Musk, who is seeking to abandon his agreement to acquire Twitter, was emboldened by the claims. 
  • Intuit, a provider of tax, accounting and other financial software services to many small-and medium-size businesses, posted better-than-expected results for the quarter ended July 31. The company came through with strong results, offering forecasts for the fiscal year ending in July 2023 that were more upbeat than Wall Street expected.