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. 

Stocks bounced higher on Friday to close a chaotic week, helped in the end by Federal Reserve Chairman Jerome Powell’s reassurance that rate hikes on the order of 75 basis points were off the table for now. Friday’s gains were not enough to erase sharp losses for the full week, as the Dow Jones index ended with its seventh weekly loss in a row, while the S&P 500 slid 2.4% and the Nasdaq Composite fell 2.8%. European markets on the other hand, managed to close the week on a positive note and avoided a fifth straight weekly decline. 


  • Shares in Asia gave up early gains on Monday, after China reported disappointing economic numbers as a result of Covid restrictions. Meanwhile markets in Singapore, Malaysia, Indonesia and Thailand are closed for a holiday today. 
  • US stock futures retreated this morning similar to European markets which are also pointing to a weak start. 
  • Oil prices fell more than 1% early morning as investors took profits following strong gains from late last week, while weak economic data in China weighed on sentiment. 
  • China reported a drop in retail sales and industrial production in April which was far worse than analysts had expected. Retail sales fell 11.1% in April from a year ago, more than the predicted 6.1% decline. Meantime, industrial production dropped by 2.9% in April from a year earlier, in contrast with expectations for a slight increase of 0.4%. 
  • The Euro hit a fresh 5-year low of $1.035 last week, approaching the January 2017 trough of $1.0341, a breach of which would put it at the lowest level in 20 years. The common currency has been under heavy pressure since February as the invasion of Ukraine by Russia deepened the energy crisis, boosted inflation, and is slowing growth. Investors are currently expecting the ECB to raise rates by 25bps in both July and September while delivering another increase at the end of the year. 
  • Finland and Sweden are both set to apply for membership in NATO, the countries said on Sunday, in a historic move for the Nordic countries which are known for their policies of military neutrality. Finland shares an 830-mile border with Russia and if it does join the military alliance, the land border that Russia shares with NATO territories would roughly double. 
  • Ryanair’s net loss for the fourth quarter narrowed as higher revenue beat consensus estimates while it expects to return to profitability in fiscal 2023. The company said that although there was pent-up demand and that it was optimistic that peak fares in summer 2022 will be higher than in the same period in 2019, it wasn’t able to provide profit guidance for the year due to the risk stemming from the pandemic and the war in Ukraine. 
  • Aramco, which last week surpassed Apple as the world’s most valuable company, reported a more than 80% jump in net profit on Sunday, topping analyst expectations and setting a new quarterly earnings record since its IPO three years ago. 
  • Twitter’s proposed acquisition by billionaire Elon Musk is “temporary on hold” over a query about the number of fake accounts on the platform. However, Musk said he is “still committed” to the $44 billion deal.