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. 

US equities pulled back from session lows on Friday, ending flat amid lingering worries about soaring inflation hitting companies’ profit margins, and an aggressive tightening potentially causing a recession. The Dow Jones Industrial Average closed up 8 points after being down more than 600 points, and the Nasdaq Composite fell 0.3% and is already deep in the bear market territory, trading 30% off its highs. The S&P 500 finished unchanged after falling as much as 2.3%. For the week, the Dow was off by 2.9%, its first 8-week losing streak since 1923. The S&P 500 was also down by 3% and the Nasdaq lost 3.8%, their seven-straight week of decline. Meanwhile European markets managed to gain some ground on Friday but still posted a weekly decline.   


  • Asian shares came under pressure on Monday as persistent worries about inflation and rising interest rates dogged the global economic outlook and fresh selling in technology stocks weighed on Chinese markets. 
  • European equity futures gained some ground this morning in synch with their US counterparts. 
  • Oil prices fell on Monday amid tight supply ahead of US driving season and reports that Shanghai prepares to reopen after a two-month lockdown. Gains were capped, however, by concerns over the impact of China’s zero-Covid policy and the EU’s inability to reach a deal on banning Russian oil. 
  • Australia’s center-left opposition led by Anthony Albanese won a national election on Saturday. The new government faces the potential of a hung parliament as it may need to compromise with minor parties to implement its economic agenda. 
  • President Joe Biden is meeting Japan’s prime minister on a trip to Tokyo where he will seek the further cooperation from the US ally that has shown support for sanctions to punish Russia for its war on Ukraine. 
  • European Central Bank President Christine Lagarde said cryptocurrencies are “based on nothing” and should be regulated to steer people away from speculating on them with their life savings. Lagarde said that she’s concerned about people “who have no understanding of the risks, who will lose it all and who will be terribly disappointed, which is why I believe that they should be regulated.” 
  • The World Health Organisation said that as of Saturday it has confirmed about 92 cases and 28 suspected cases of monkeypox, with recent outbreaks reported in 12 countries where the disease is not typically found. Monkeypox is spread through close contact. It usually begins with flu-like symptoms and then progresses to body rashes. 
  • Chipmaker Broadcom is in talks to acquire cloud service provider VMware, people familiar with the matter told Reuters. Negotiations are ongoing but a deal does not seem to be imminent, the sources said.