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. 

The Dow Jones cut early losses and added over 140 points on Thursday, the S&P 500 rose 0.3%, while the Nasdaq shed 0.3% as investors eyed a key jobs report later today for clues of the Fed’s future policy path. Healthcare and utility shares advanced the most, while energy and materials were among the worst performing sectors. Elsewhere, European equity markets started the month on the wrong foot, with all sectors and major bourses closing firmly in the red. 


  • Asian equity markets were mixed this morning with the Nikkei trading flat and the Hang Seng slipping over 0.5%, while the ASX 200 in Australia, the Kospi in South Korea and mainland China markets were all trading higher.  
  • Equities are in something of a holding pattern this morning before the critical US jobs report although European bourses are seen playing catch up to the late rebound overnight on US markets.
  • Oil prices jumped near 2% on Friday after slipping over 3% in the prior session on hopes that OPEC+ will discuss output cuts at a meeting on Monday. For the week, however, both WTI and Brent crude are heading for their worst weekly drop in four. 
  • The ISM Manufacturing PMI in the US was steady at 52.8 in August, the same as in July and close to 53 in June. Figures beat market forecasts of 52, but still pointed to low levels of factory growth not seen since June 2020. 
  • The number of Americans filing new claims for unemployment benefits decreased by 5k to 232k last week from a downwardly revised 237k in the previous period and well below the market estimate of 248k. It was the lowest level for initial claims since the week ending 25th June, pointing to tight labour conditions even in an economic slowdown. 
  • Global bonds slumped into their first bear market in a generation, hurt by rapid interest rate hikes in many economies to quell historically high inflation. The Bloomberg Global Aggregate Total Return Index of government and investment-grade corporate bonds has fallen more than 20% since its 2021 peak, the biggest drawdown since its 1990 inception. 
  • Ryanair in August flew a record number of passengers for the fourth month in a row. The Irish low-cost carrier flew 16.9 million passengers in August compared to a pre-Covid peak of 14.9 million in August 2019. 
  • Chinese electric vehicle manufacturer Nio said Thursday that it delivered 10.677 vehicles in August, up nearly 82% from a year earlier.