Conjecture continues about the economic and financial consequences of the war in Ukraine.

We’ve seen wild moves in oil, nickel, and wheat, to name just some of the volatility Russia’s invasion has triggered.

For insight and perspective we turn to a report from BCA Research by their Chief Global Strategist, Peter Berezin.

In these excerpts, he details the indirect economic effects of the war on commodity markets, financial conditions, economic growth and stocks.

For the full report, one needs to be a BCA subscriber.


  • While the direct economic effects of the war on global growth are likely to be modest – given that Russia and Ukraine represent less than 2% of global GDP in dollar terms – the indirect effects could be quite sizeable.


  • Two indirect effects stand out: the impact of the war on commodity markets; and the impact on financial conditions.


  • Russia is a key player in the global energy and metals markets. Ukraine is also a sizeable agricultural producer, as well as an exporter of certain specialized products such as neon, which is used in the semiconductor industry.




  • Financial conditions have tightened moderately since the outbreak of the war. The only saving grace has been the significant decline in real government bond yields in developed economies.


  • Ultimately, the war’s impact on global growth will depend on how long it lasts. BCA’s geopolitical strategists expect the conflict to escalate further in the coming weeks, warranting a somewhat cautious near-term stance.


  • Stocks should rally in the second half of the year, as the war winds down and energy prices come off the boil. There are still many tailwinds supporting the global economy, which suggests that equity prices will probably be higher in 12 months’ time.


Bottom Line: The conflict in Ukraine will continue to put pressure on stocks for the next month or so.Economic
However, equities should recover in the second half of the year, led by European and emerging market stocks.
For the full report, one needs to be a BCA Research subscriber.