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 and the S&P 500 fell for the second session on Tuesday, while the Nasdaq extended losses into a seventh session, the longest losing streak since November 2016, as the latest economic data reinforced market bets on more interest rate hikes from the Federal Reserve. Elsewhere, most major European bourses gained sound ground yesterday, with the Euro Stoxx 50 adding 0.3% as consumer discretionary and materials shares outperformed the broader market. 


  • Asian shares fell on Wednesday as investors failed to find any cheer in strong US economic data and instead considered what it might mean for a hawkish Fed. Losses were more pronounced in the Kospi, Hang Seng and the ASX 200, which all shed more than 1%, while the Shanghai Composite pared earlier losses to register a slight gain. 
  • European shares are headed for losses in line with a drop in US futures as a strong dollar and higher yields continue to weigh on the market. 
  • Oil prices fell this morning, sliding to the lowest levels since January, as investors fretted again about a weakening demand outlook driven by aggressive monetary tightening across the globe and top importer China’s Covid-19 curbs. 
  • China’s exports unexpectedly grew by 7.1% yoy in August, below market forecasts of 12.8% and following an 18% jump a month earlier. It was the lowest growth in shipments and the first single-digit growth since April. Imports also missed forecasts and were up a mere 0.3%, the slowest growth in inbound shipments since a stagnation in April. 
  • The Australian economy advanced 0.9% qoq in Q1, compared with market forecasts of 1.0% and after a downwardly revised 0.7% rise in Q1. This was the third straight quarter of growth, marking the first full quarter of reopened domestic and international borders since the pandemic began. 
  • The ISM Services PMI unexpectedly edged higher to 56.9 in August from 56.7 in July, beating market forecasts of 55.1 and pointing to the strongest growth in services activity in four months. Business activity and new orders expanded faster, employment rebounded, and price pressures eased. 
  • Liz Truss promised a major package of support this week worth as much as £200 billion and spread over the next 18 months to contain energy prices. If Truss does freeze energy bills for households and business, Britain’s inflation rate may have already peaked. 
  • Russia wants to buy millions of rockets and artillery shells from North Korea to use in its war against Ukraine, in a sign that Western sanctions on its military and economy are starting to bite, US officials said. The move would violate a United Nations arms embargo that Russia voted for. 
  • Apple is today expected to unveil the iPhone 14 and its next slate of smart watches at a launch event.