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 ended lower after a volatile session on Thursday, with Cisco slumping after giving a dismal outlook, while investors fretted about inflation and rising interest rates. The S&P 500 dropped 0.6%, inching closer to bear market territory, the Nasdaq was down 0.2% and the Dow shed 237 points. European equity markets also extended losses yesterday, with the benchmark Stoxx 600 Index shedding 1.4% amid broad risk-off sentiment across all markets. 


  • Shares in Asia rose on Friday, with Hong Kong shares leading gains as a volatile trading week comes to a close. 
  • European equities are set to follow Asian shares higher while US stock futures are also pointing to solid gains at the open. 
  • Oil prices were little changed on Friday as worries about weaker economic growth offset expectations that crude demand could rebound in China as Shanghai lifts some coronavirus slowdown. 
  • The PBoC held steady its key rates for corporate and household loans at the May fixing, but slashed the mortgage reference rate for the second time this year, by a more-than-expected 15 basis points. 
  • US President Joe Biden welcomed congressional passage of $40 billion in aid for Ukraine and announced a new package of weapons he said would be sent “directly to the front lines.” Separately, officials from the G7 countries discussed secondary sanctions and other ways to limit Russia’s oil revenue while minimising the impact on energy prices. A possible price cap on Russian crude was one element – forming effectively a buyers’ cartel. 
  • Kansas City Fed President Esther George hinted yesterday that the stock market selloff is not going to dissuade officials at the Federal Reserve, for now at least, from half-point interest-rate hikes. 
  • UK consumer confidence fell to its lowest level in at least 48 years after a surge in the cost-of-living left people gloomier than at the depths of the 1970s energy crisis and during the recession more than a decade ago. 
  • Apple’s board of directors previewed its mixed-reality handset last week, according to Bloomberg, suggesting that its next major new product category could launch soon.