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. 

In regular trading on Tuesday the Dow fell 0.96%, while the S&P 500 and Nasdaq Composite each tumbled about 1.1%. All three benchmarks are on track to finish August with losses, retracing about half of the summer rebound. Most European equity markets also closed lower after opening higher on Tuesday, with the benchmark Euro Stoxx 50 falling 0.24%. 


  • Asian markets extended the global equity selloff on Wednesday. Japan’s Nikkei sagged 0.6%, while Australia’s share benchmark slid 0.4% and South Korea’s Kospi lost 0.5%. In the meantime, Chinese blue chips retreated 0.5% and Hong Kong’s Hang Seng slumped 1.8%, with its tech shares tumbling 2.5%. 
  • European equities are set to advance this morning in line with US futures which are looking to reverse a 3-day selloff. 
  • Oil prices were up roughly 0.5% this morning but still on track to decline for the third straight month on a weakening demand outlook as aggressive rate hikes by major central banks threaten global growth, while top importer China adheres to a strict zero-Covid strategy that is derailing recovery. 
  • China’s factory activity contracted for the second straight month in August, while services declined to a 3-month low. 
  • The number of job openings in the US rose by 199k form a month earlier to 11.2 million in July, while markets had expected it to drop to 10.45 million. It was the first increase in job openings after three consecutive months of slight declines, reflecting persistent tightness in the labour market amid worker shortages. 
  • New York Fed President John Williams said he expects interest rates to continue higher and to remain at those levels until inflation is subdued. He also said that reducing inflation will require real interest rates to be positive. 
  • The annual inflation rate in Germany increased to 7.9% in August, slightly above market forecasts of 7.8%, and again reaching the highest level since the 1990’s reunification, highlighting the impact of the ongoing energy crisis and Covid-19 supply chain constraints on households’ finances. 
  • Today marks the start of a three-day halt of the Nord Stream pipeline, a key source of natural gas for the European Union, and concerns are widespread that Moscow will find another excuse to clamp down on supplies. Hours ahead of the outage, Gazprom notified French utility Engie it would halt deliveries from Thursday because of a disagreement over payments. 
  • Baidu announced that its robotaxis have grabbed about 10% of the ride-hailing market in a suburb of Beijing city, with each vehicle running more than 20 trips a day on average. Local rules require human staff to sit in the vehicle with passengers.