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 pared major losses in a choppy session Tuesday, with the Dow slipping 0.4% and the S&P 500 down 0.2%, while the Nasdaq edged out a gain of 0.25%. Intense selling pressure continues as investors are concerned over corporate earnings given soaring interest rates, an intensely strong dollar, and prospects of an economic downturn. European markets turned to the downside late in the day to finish mostly lower amid heightened energy and monetary policy concerns. 


  • Shares in Asia tumbled on Wednesday as markets in South Korea, Hong Kong, and Japan sank over 2%, respectively, while those in China and Australia each slipped near 1%. 
  • European shares are poised to fall at the open following the trend set by US futures overnight. 
  • Oil prices were mixed in early trade today as support from US production cuts caused by Hurricane Ian contended with crude storage builds and a strong dollar. In the meantime, the recent sharp falls in oil prices stoked speculation that OPEC+ may cut output to stem the slide, with Russia reportedly lobbying the group to slash production by about 1 million barrels a day. 
  • The dollar index increased to a 20-year high after a White House official ruled out a currency agreement to weaken the currency. Meanwhile, Chicago Fed President Charles Evans and St. Louis Fed President James Bullard made a case for more rate hikes, reaffirming the central bank’s commitment to tame inflation even at the risk of a recession. Nonetheless, Evans did mention that he is getting a little nervous about going too far, too fast with rate hikes. 
  • New orders for US manufactured durable goods declined 0.2% month-over-month in August, following a revised 0.1% drop in July and compared to market forecasts of a bigger 0.4% fall. 
  • The International Monetary Fund delivered a stinging rebuke of the UK’s new unfunded tax cuts by calling them excessive and in need of revision. The IMF said that Chancellor Kwasi Kwarteng should use a plan scheduled for release in November to “consider ways to provide support that is more targeted and re-evaluate the tax measures, especially those that benefit high-income earners.” 
  • Russia prepared to declare landslide victories in the hastily organised “referendums” it held in the territories currently occupied by its forces. The United Nations has condemned the voting as illegal. Russia’s energy conflict with Europe escalated dramatically as three pipelines were wrecked in suspected sabotage and Gazprom warned that the last remaining route to western Europe is at risk. 
  • Bloomberg reported on Tuesday that Apple is dropping plans to increase the production of its new iPhone this year after an anticipated surge in demand failed to materialise.   
  • Volkswagen is scheduled to price the IPO of its sports-car unit Porsche later today at €82.5 following strong demand. The shares will start trading on the Frankfurt Stock Exchange tomorrow.