Macroeconomics

August is heading into its final week and the Olympics are now over. General activity in the financial markets continues to be influenced by the holidays as many people are still away from their desks.

However, the fact that people are on holiday does not mean that nothing has happened to influence the financial markets or that little happened. Our concern that the war in the Caucasus could become a factor unfortunately proved to be right. Although military activity has ceased, it is pretty obvious that the conflict was just a long-awaited opportunity for the Russians to have a go at regaining control of the only oil pipelines leading to the west that do not pass through Russian territory.

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