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 globalisation and further fuel higher structural inflation. 

The stock market finished the first week on May with modest losses that masked a turbulent performance. Investors remain nervous about the Fed’s ability to tighten financial conditions to combat inflation at 40-year highs without knocking the economy into a recession. The Dow Jones Average lost only 0.2% for the week, while the S&P 500 also fell 0.2% and the Nasdaq Composite slumped 1.5%, closing nearly 25% below its record high last November. Meantime, Europe’s major indices closed sharply lower on Friday wrapping an overall negative week for the region. 


  • Shares in Asia fell on Monday as investors watched for market reaction to Chinese trade data that came in better-than-expected. The Nikkei 225 led the losses in the region with a decline of over 2% followed by the Kospi in South Korean and the ASX 200 in Australia. Mainland Chinese stocks bucked the overall trend moving marginally higher. 
  • European stocks are seen heading for a lower open as US futures remain in the red after a volatile week of trading. 
  • Oil prices slipped this morning amid fears a global recession could dampen oil demand, with investors eyeing European Union talks on a Russian oil embargo that is expected to tighten global supplies. 
  • China’s trade surplus surged to $51.12 bn in April, up from $40.89 bn in the same month a year earlier, beating market forecasts of $50.65 bn. It was the largest trade surplus since January, as exports rose by just 3.9% while imports were unchanged. 
  • Russian President Vladimir Putin may today reveal the next steps for Russia’s war in Ukraine as he is due to speak at the nation’s May 9 Victory Day parade marking the anniversary of Nazi German’s surrender in 1945. 
  • The Group of Seven most-industrialized countries pledged to ban imports of Russian crude. A similar plan by the European Union is being held up by Hungary, with the bloc expected to resume talks in coming days. 
  • The US economy added 428k jobs in April, the same as in March and above market expectations of 391k. It marks a 12th straight month of job gains above 400k amid an increasingly tight labour market. Job growth was widespread, led by leisure and hospitality, manufacturing, transportation and warehousing. 
  • Investors will be tested once again this week with the publication of the latest inflation report in the US. Consumer prices are expected to show a 0.2% month-over-month increase and a decrease in the year-over-year inflation rate to 8.2% from 8.5%.