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. 

Wall Street ended lower on Friday as investors digested a slew of disappointing corporate earnings reports and weak economic data. Twitter reported weaker-than-expected earnings, revenue, and user growth for the second quarter. A dismal outlook from the social media giant followed disappointing results from Snap, which tumbled almost 40%, sending shockwaves through other social media companies, including Meta and Pinterest. Verizon dropped around 7% after missing Wall Street’s estimates while offering weak guidance. On the data from, the US business activity contracted in July for the first time in nearly two years, pressured by a sharp slowdown in the service sector, and intensified worries over the economic outlook. Still, the Dow rallied almost 2% for the week, while the S&P 500 and the Nasdaq outperformed by adding 2.5% and 3.5%, respectively. European bourses were also up for the week, with the benchmark Euro Stoxx 50 up by 2.5%, after ending Friday’s session broadly flat. 


  • Shares in Asia mostly fell on Monday amid caution ahead of the Fed’s interest rate decision later this week. The Nikkei slipped after gaining in the prior 7 sessions, driven by basic material shares. Also, the Shanghai Composite and the Hang Seng traded lower, as China Evergrande’s CEO and CFO resigned after a probe of their involvement in diverting loans. The Kospi rose, however, supported by foreign buying. 
  • European equities are poised to follow Asian shares lower, while US futures are pointing to a muted open later this afternoon. 
  • Oil prices fell for the fourth straight session this morning, as fears that a global economic slowdown would hurt energy demand outweighed signs of ongoing market tightness and disrupted supply. Last week, President Joe Biden failed to secure a pledge from Arab leaders to pump more oil, while Central Bank Governor Elvira Nabiullina said that Russia will not supply oil to countries that impose a price cap. 
  • Wheat prices jumped after Russia attacked the sea port of Odesa with cruise missiles at the weekend, just hours after signing a deal to unblock grain exports from Ukraine. Futures in Chicago surged as much as 4.6% before pairing gains on Monday. 
  • The World Health Organisation has called the monkeypox outbreak a public health emergency of international concern, overruling a divided expert panel to issue the group’s highest alert.   
  • Ryanair this morning posted a better-than-expected after-tax profit of €170mn for the three months to the end of June, its first profit in the quarter in three years but well short of pre-Covid 19 profit levels. The Irish airline said it was too soon to provide a meaningful profit guidance for its financial year, which ends in March 2023. 
  • Volkswagen CEO Herbert Diess will vacate the position on 1st September following a “mutual agreement”. Diess will be succeeded by Porsche CEO Oliver Blume, who will retain the role even after the luxury automaker’s planned share market debut. Media reports have speculated that the reason for his firing is linked to the clashes he had with labour representatives over the past months. 
  • It will be the busiest week of summer in the US this week, with the Fed decision, Q2 GDP growth rate, and earnings reports for more than a third of S&P 500 companies taking centre stage. Also, Eurozone’s largest economies including Germany, France, Italy, and Spain will be publishing key reports on growth and inflation rate.