Ongoing Markets Commentary: European stocks set to open higher

written on April 8, 2022

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 globalisation and further fuel higher structural inflation. 

All major US indices turned positive in the last hour of trading on Thursday, recovering from two days of losses. The Dow finished the session more than 87 points higher, after dropping as much as 300 points earlier in the session and the S&P 500 and Nasdaq advanced 0.4% and 0.1%, respectively. In Europe, the Euro Stoxx 50 finished Thursday’s session lower, with the index declining for the third session in a row. 

Summary

  • Shares in Asia gave up early gains to mostly fall on Friday, with Australia being the only exception. 
  • Oil prices were lower this morning and on track for their second straight weekly drop, amid huge reserve releases by member nations of the IEA. In addition, demand concerns from China lingered as cities have been locked down due to Covid-19 outbreaks. 
  • European stocks look set to open higher while US futures were pointing towards a flat open. 
  • President Vladimir Putin is betting his troops can deliver a victory in Ukraine’s east to rescue Russia’s faltering invasion after failing to seize the capital Kyiv with a lightning war, though he faces a tough task. 
  • The European Union agree to ban coal imports from Russia in its first move targeting Moscow’s crucial energy revenue. The sanctions package, which also includes a ban on most Russian trucks and ships entering the EU, was signed off by the bloc’s diplomats Thursday. 

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