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 swung between gains and losses before closing higher on Wednesday, as the Dow added 70 points and both the S&P 500 and the Nasdaq were up 0.4%, with the latter consolidating last session’s strong performance. European bourses also closed mostly higher yesterday, with the Euro Stoxx 50 rallying by 1.8% led by gains in retail and tech shares. 


  • Technology shares lifted Asian markets higher on Thursday amid a slight easing of concerns on inflation and recession. 
  • European and US equity futures are seen building on the gains of the previous session. 
  • Oil prices edged up on Thursday but are still down about 9% so far this week, remaining under pressure from mounting fears of a global economic slowdown and an industry report showing a surprise jump in US crude stockpiles. In the meantime, it was announced that the secretary general of OPEC, Mohammed Barkindo, has died at the age of 63, a few days before he was expected to step down at the end of this month and after six years in the top job at OPEC. 
  • Boris Johnson suffered an avalanche of resignations from his government yesterday that’s unprecedented in recent British political history. The UK prime minister made clear in Parliament that he had no intention of stepping down. Johnson also fired Michael Gove – one of the Cabinet’s remaining big hitters – in what was seen as a sign of revenge for his attempt to remove the premier and a past act of betrayal. 
  • Fed policymakers continued to anticipate that ongoing increases in the fed funds rate would be appropriate, and backed a 50 to 75 basis point hike in July, FOMC minutes from the June meeting showed yesterday. Officials also noted that the US economic outlook warranted moving to a restrictive stance of policy, and they recognised the possibility that an even more restrictive stance could be appropriate if elevated inflation pressures were to persist.  
  • The US and its allies have discussed trying to cap the price on Russian oil between $40 and about $60 a barrel. The range spans from what is believed to be Russia’s marginal cost of production and the price of its oil before the 24th of February invasion of Ukraine. 
  • In the US, the ISM Services PMI edged lower to 55.3 in June from 55.9 in May, but continued to point to strong growth for the services sector, beating the market forecast of 54.3. The slight slowdown was due to softer new orders and a fall in employment while business activity rose faster and price pressures eased for a second month. 
  • Australia posted the largest trade surplus on record in May, easily beating market forecasts, with both exports and imports touching new peaks. Exports jumped 9.5% mom, amid a surge in shipments of coal and LNG, while imports climbed 5.8%, due to robust domestic demand as the economy fully emerged from Covid-19 disruptions. 
  • The French government plans to fully nationalise EDF, Prime Minister Elisabeth Borne announced on Wednesday. EDF, in which the state already owns 84%, faces delays and budget over-runs on new nuclear plants in France and Britain as well as corrosion problems in some of its ageing reactors. The company has also been hurt by government rules forcing it to sell power to rivals at a discount while prices hit record highs. 
  • ASML announced yesterday that it is unaware of the US government’s plan to restrict its sale of slightly older machines to China, adding that the discussion is not new. The company has not been allowed to sell its most advanced machines to Chinese chipmakers since 2019 due to an agreement between the Netherlands and the US. The statement follows a report by Bloomberg that said the US wants the agreement to include ASML’s sale of its older machines, commonly used in chips needed by cars, phones, computers and robots.