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’s main indices began a holiday-shortened week well in the green as investors took advantage of a selloff in the previous week to open new positions. Airline stocks were among the biggest gainers ahead of an anticipated travel boom, while recently beaten-down technology stocks also enjoyed some respite. The Dow gained 2.15%, the S&P 500 jumped 2.45% and the Nasdaq Composite rallied 2.51%. Meanwhile, European equities rose for a third consecutive session on Tuesday, with the Euro Stoxx 50 index adding 0.70%, driven by gains among materials and consumer discretionary shares. 


  • Shares in Asia mostly traded lower this morning, as economic fears continue to weigh on the market. Among regional equity indices, South Korea led losses, with the Kospi falling by around 1.75%. Elsewhere, the Japanese yen hit a fresh 24-year low against the dollar.  
  • European markets are seen opening lower once again in tandem with their US counterparts as the optimism that sparked a bounce yesterday evaporated overnight. 
  • Oil prices sank over 3% on Wednesday, amid mounting fears over a possible recession. Meanwhile, US President Biden is set to meet with 7 large oil companies tomorrow on the back of a campaign to drive down fuel prices. Both WTI oil and Brent crude hit their lowest in near a month, trading below $106 a barrel and $111, each. 
  • Kellogg announced plans to split into three companies focused on cereals, snacks and plant-based foods. The spin-offs are expected to be completed by the end of 2023 while Kellogg is yet to decide on the three companies’ names. 
  • The Russian ruble touched a 7-year high of 50 per USD before easing back to the 55 level yesterday, as soaring prices for Russian’s main exports and a drop in imports continue to support the currency. Despite higher uncertainty of energy supply levels to Europe, surging demand for Russian oil and natural gas from Asia amid higher energy prices supported the ruble at robust levels. 
  • Russia is currently conducting military exercises with simulated missile attacks against Estonia, the Baltic nation said, warning of escalating tensions between Moscow and a front-line NATO member. Estonia’s Defence Ministry said that provocative behaviour has intensified on Estonia’s border with Russia ahead of the North Atlantic Treaty Organisation’s summit scheduled for next week in Madrid. 
  • The largest party in Italian Prime Minister Mario Draghi’s governing coalition split on Tuesday after Foreign Minister Luigi Di Maio quit the group over its refusal to back military support for Ukraine. The decision follows days of back and forth with former Prime Minister Giuseppe Conte, the current Five Star leader who is opposed to sending weapons to Ukraine, conflicting with the government’s stance. 
  • UK teachers and postal workers warned of potential industrial action if their pay doesn’t track spiralling inflation, adding to this week’s rail strikes and underlining a wider sense of malaise in the British workforce amid a growing squeeze on living standards.