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. 

In regular trading on Thursday, the Dow lost over 700 points, falling below the 30,000 level, while the S&P 500 and Nasdaq tumbled 3.3% and 4.1%, respectively, bringing all three benchmarks to levels not seen since late 2020. Those moves came as investors grow increasingly worried about a potential economic slowdown, with several key economic data falling short of expectations this week. European shares also extended losses yesterday, with the benchmark Euro Stoxx 50 down almost 3%. 


  • Shares in Asia mostly fell on Friday, with the ASX and the Nikkei down near 2% each, and South Korean stocks were set to post their biggest weekly fall since March 2020. The Hang Seng rose, however, while the Shanghai Composite was flat, on signs of a recovery in some sectors in China during May after strict Covid-19 lockdowns. 
  • European equities are set to recover some ground this morning while futures on Wall Street are also pointing higher at this time of the day. 
  • Oil prices were flat this morning and were headed for their first weekly decline since early May, as a highly uncertain outlook for global growth and fuel demand following numerous rate hikes around the world this week weighed on markets. Meanwhile, investors remained watchful of supply tightness after the US announced new sanctions on Iran. 
  • The Bank of Japan left its key short-term interest rate unchanged at –0.1% and that for 10-year bond yields around 0% during its June meeting earlier today, by an 8-1 vote as widely expected. 
  • The Bank of England raised its key rate by a widely expected 25bps to 1.25% during its June meeting, a fifth consecutive rate hike and pushing borrowing costs to the highest in 13 years as it tries to temper soaring inflation. The move followed a surprise 50bps hike for the Swiss National Bank, a first for the past 15 years. 
  • The European Commission plans to recommend that Ukraine and Moldova be granted candidate status in a symbolic step forward in the lengthy process to become members of the European Union. The EU’s executive arm is set to issue its opinion on Friday and will impose conditions that the countries will have to meet in the future on the rule of law, justice and anti-corruption. 
  • UK online fashion retailer ASOS yesterday lowered its full-year guidance for the year ending Aug. 31, citing uncertain consumer purchasing behaviour amid the rising inflationary pressures. The company now expects revenue growth of 4% to 7% and adjusted pretax profit of between £20 million to £60 million in fiscal 2022. Previous forecasts were for a 10% to 15% growth in revenue and adjusted pretax profit of £110 million to £140 million. 
  • Tesla raised prices for all its car models in the US on Thursday, its latest price hike amid ongoing global supply-chain issues.