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. 

US equities plummeted in early Tuesday trading as investors’ concerns of recession grew, but rebounded in the afternoon to close flat for the day. The Dow fell about 130 points, or 0.4%, after being down nearly 700 points earlier in the day. The S&P 500 gained 0.2% after dropping more than 2% earlier and the Nasdaq Composite was up 1.8%. Tech stocks buoyed markets as investors hope that a possible recession will lead to lower interest rates. Elsewhere, European equity markets closed towards the low for the day, plummeting well over 2%. 


  • Asian markets were sharply lower today with shares in Hong Kong off the most as Covid concerns resurged in China. 
  • European markets head for a higher open as investors look to reverse negative slide while US futures were little changed ahead of the publication of the Fed’s June meeting minutes. 
  • Oil prices rose on Wednesday after falling below the key level in the prior session, as supply side issues outweighed fears about a potential recession due to aggressive tightening by central banks. In the meantime, Saudi Arabia has raised August crude oil prices for Asian buyers to near record levels, while analysts attributed the rebound on short-covering and bargain hunting. 
  • The euro fell to its lowest level in two decades on Tuesday as fears of a recession in the eurozone ramped up, with gas prices soaring and the Ukraine war showing no signs of abating. The euro shed around 1.5% for the session to hit $1.0265 against the dollar, while the dollar index gained 1.29% to 106.49. 
  • Two senior UK cabinet ministers resigned on Tuesday in protest over Prime Minister Boris Johnson’s leadership, following a string of scandals that have plagued his tenure over the last few months. British Finance Minister Rishi Sunak said in his resignation letter that the government should be run “properly, competently and seriously.” Health Secretary Sajid Javid also resigned in protest over Johnson’s leadership. 
  • New orders for US manufactured goods jumped 1.6% month-over-month in May, following an upwardly revised 0.7% rise in April and beating market forecasts of a 0.5% gain, in a sign demand for products remained strong. 
  • Tokyo Electric Power Co (Tepco) is considering joining a partnership between state-backed Japan Investment Corp and Japan Industrial Partners to bid for Toshiba Corp, according to a Bloomberg article. Toshiba said last month it had received eight initial buyout proposals and two proposals for capital alliances that would see it remain listed. 
  • Tesla reported yesterday a rare drop in production and sales in the second quarter amid the Covid lockdowns in China. Completed sales dropped nearly 18%, to about 255,000 vehicles in Q2 compared to Q1. Production fell 15% to 259,000. One analyst calculated that the lockdowns likely cost Tesla a fall in production of about 70,000 vehicles.