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. 

All three major US indices closed higher on Thursday. The Dow was up 347 points, the S&P 500 booked a 1.5% gain and the Nasdaq ended 2.3% higher, with the latter two indices extending gains for the fourth session in a row. Cyclicals and commodity-linked shares led the climbs, as softer jobs data calmed concerns about the extent of the Fed’s tightening. Elsewhere, major European bourses also closed higher with gains of around 2%. 


  • Shares in Asia rose Friday, with the Kospi trading at over one-week high, on upbeat quarterly results from Samsung. In the meantime, equities in China and Hong Kong edged up, as Beijing plans to set up a state infrastructure investment fund in Q3 of 2022. The Nikkei pared gains after former prime minister Shinzo Abe was shot while campaigning in the city of Nara.  
  • European equity futures were steady earlier today while US markets were seen cautious ahead of a highly anticipated monthly jobs report due later today. 
  • Oil priced advanced further this morning, following a rebound in the previous session, but is still set to finish the week lower as concerns about a global recession that is expected to hurt energy demand outweighed persistent supply-side issues. 
  • Former Japanese Prime Minister Shinzo Abe was unresponsive after being shot during a political event on Friday. Abe, 67, was shot twice from behind from about three meters away while campaigning for Sunday’s upper house election in the city of Nara. Police arrested a local man in his 40s. 
  • UK Prime Minister Boris Johnson yesterday resigned from his post following pressure to do so after almost half of his MPs did so themselves. Johnson said he intended to remain as PM until a new Tory leader was elected but his plans were seen under threat as the Conservative Party is urgently drawing up plans for an accelerated contest to choose his successor by the end of summer.  
  • Two of the Federal Reserve’s most hawkish policy makers backed raising interest rates another 75 basis points this month to curb inflation, while still seeing a good chance the US economy will have a soft landing. Governor Christopher Waller and James Bullard, both voting members of the Federal Open Market Committee this year, stressed the need to get policy into restrictive territory. 
  • Travel chaos is spreading even wider in Europe, with Deutsche Lufthansa preparing another wave of flight cancellations due to staff shortages. Europe’s biggest airline, which already cancelled a total of 3,100 flights last month, is preparing to eliminate about one fifth of departures from its Frankfurt and Munich hubs on selective days next week.