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 booked marginal gains moments before the closing bell on Wednesday, with the S&P 500 and the Nasdaq adding 0.3% and 0.7%, respectively, while the Dow recovered from a 200-point loss to close flat. In the meantime, European equity markets closed mostly lower yesterday, with the Euro Stoxx 50 down 0.5%. 


  • Shares in Asia rose mildly on Thursday after Wednesday’s negative session. Gains ranged from a high of 0.5% in the Australia’s ASX 200 to 0.1% in South Korea’s Kospi Index. 
  • European equity futures edged higher this morning following the overnight movements in US futures. 
  • Oil prices were hovering along the flat line on Thursday but are still up more than 1% this week amid a robust demand outlook and ongoing signs of tight physical markets. The International Energy Agency reported yesterday that it expects large-scale gas-to-oil switching, estimating an average of 700,000 barrels per day from October 2022 to March 2023, double the level of a year ago. 
  • Chinese President Xi Jinping is set to meet Putin today but is unlikely to throw the Russian leader a lifeline, despite their declaration of a “no limits” friendship before the invasion. 
  • The European Commission aims to introduce a raft of regulatory changes to alleviate the liquidity squeeze in the energy sector. The proposed measures include raising the clearing threshold for commodities and other derivatives to €4 billion and allowing bank guarantees to be accepted as collateral against margin calls. 
  • In France, the government will budget €16 billion to limit power and gas increases to 15% for households and small companies next year. 
  • The Producer Price Index for final demand in the US fell 0.1% month-over-month in August, following a 0.4% drop in July and in line with forecasts. Year-on-year, producer prices increased 8.7%, the least in a year and below 9.8% in July. The core index went up 0.4% on the month and 7.3% on the year. 
  • Industrial trucks and supply chain solutions provider Kion Group announced that it expects a substantial impact to its third quarter earnings due to intensifying supply chain shortages, as well as significantly higher costs increases for materials, energy and logistics. 
  • Germany’s Uniper said on Wednesday the government might take a controlling stake in the company as the ailing gas importer seeks further aid, paving the way for a what could result in a full nationalisation of the firm. 
  • Inditex, the owner of the Zara brand, reported yesterday a 24.5% jump in six-month sales and a higher profit than a year ago. The company said it plans to hike prices again this autumn as it tries to offset soaring costs despite worries demand will wane due to the cost-of-living crisis.