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 three major US stock indices closed sharply lower on Monday, with the Dow and the S&P trading at levels not seen in more than a year and the Nasdaq hitting the lowest since November of 2020.  Investors are increasingly concerned about the implications of tighter global monetary policy on the growth momentum.  At the end of the session, the S&P 500 had dropped 3.2%, the Dow declined 2.0% and the Nasdaq Composite plunged 4.3%.  Meantime, on the other side of the Atlantic, European markets extended losses for the fourth consecutive session to levels not seen since early March.  


  • Most Asian markets fell this morning after heavy losses overnight on Wall Street. Returning to trade after a holiday on Monday, Hong Kong’s Hang Seng index fell 2.8%. Most of the losses in the region were concentrated in technology stocks, mirroring losses on the Nasdaq Composite overnight. 
  • European and US stock futures are pointing to a higher open although gains were seen limited at this stage.  
  • Oil prices tumbled more than 1% on Tuesday, extending the previous days’ steep declines as coronavirus lockdowns in top oil importer China, a strong dollar and growing recession risks fed worries about the outlook for global demand. 
  • Retail sales in the UK decreased 1.7% on a like-for-like basis in April from a year earlier, slowing further from a 0.4% decline in the previous month, as the rising cost of living crushed consumer confidence and put the brakes on consumer spending. 
  • Bayer today reported a 57.5% increase in net income for the first quarter with an 18.7% rise in net sales thanks to substantial sales and earnings growth in its crop science and consumer health segments. The company confirmed its 2022 outlook provided in March after a successful start to the year despite supply chain and energy uncertainties. 
  • Tesla halted most of its production at its Shanghai plant due to problems securing parts for its EVs.  The plant plans to manufacture less than 200 vehicles daily, far less than the roughly 1,200 units it has been building each day since shortly after it reopened on April 19 following a 22-day closure.