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 ended mixed in regular trading on Monday, with the Dow and S&P 500 gaining 0.28% and 0.13%, respectively, while the Nasdaq dropped 0.43%. Those moves came as investors braced for the Federal Reserve meeting, key economic data and a batch of mega-cap tech earnings this week. Companies slated to report earnings on Tuesday include Microsoft, Alphabet, Visa, Coca-Cola and McDonald’s, among others. Major European bourses also struggled for momentum during yesterday’s session, with the benchmark Euro Stoxx 50 finishing primarily flat as investors digested a slew of economic releases and earnings results.  


  • Asian shares pared losses on Tuesday as investor sentiment improved on China’s reported plans to tackle a debt crisis in real estate development.   
  • European shares are on track for a muted start as US futures fell after Walmart tumbled in after-hours trading. 
  • Oil prices climbed almost 1.5% on Tuesday, building gains from the prior session, as supply tightness, a dip in US dollar, and news that Russia tightened its gas squeeze on Europe outweighed fears that expected rate hikes in the US could trigger a global slowdown and limit fuel demand. 
  • China is planning to set up a real estate fund that could be worth up to $44.4 bn to support more than a dozen property developers. The fund is said to have secured 50 bn yuan from China Construction Bank and a 30 billion yuan relending facility from the People’s Bank of China. It will be used to buy financial products issued by the developers or finance state buyers’ acquisitions of their projects. 
  • Russia is once again sharply reducing the flow of piped gas to Germany on the Nord Stream pipeline to about 20% of its capacity on Wednesday due to maintenance. If Nord Stream flows are cut off completely, and if the winter is cold, Europe’s gas in storage may run out by the end of February, according to consultant Wood Mackenzie. 
  • Liz Truss and Rishi Sunak tore strips out of each other’s plans for the UK economy in their first head-to-head debate of the campaign to replace Boris Johnson as prime minister. Sunak claimed Truss’s planned tax cuts would push up inflation, add “thousands of pounds to mortgage bills and tip millions of people into misery”. Truss rebutted that Sunak would drive the economy into recession. 
  • Walmart cut its quarterly and full-year profit estimates on Monday and said customers were paring back discretionary purchases as inflation bit into household budgets. Shares fell 10% after hours, dragging shares of other retailers lower, including Target (5.1%), Macy’s (-4.2%), Costco (-3.1%), Dollar General (-4.3%) and Amazon (-3.9%). 
  • UBS posted this morning a smaller-than-expected 5% rise in net profit for the second quarter as revenues at its investment bank fell 14%.