Headlines:
- Risk jumps as Putin said to acknowledge positive undertones in Ukraine talks
- Putin: There are certain positive shifts in talks with Ukraine
- No further details at the moment on Putin's "positive" remarks
- ECB's Kazimir: Rate hikes will not come immediately, there is time
- ECB's Rehn: Rate hike could come some weeks or several months after APP ends
- ECB's Rehn: Any adjustment to key rates will be gradual
- ECB's Villeroy: Inflation should get back down to around 2%
- Germany February final CPI +5.1% vs +5.1% y/y prelim
- UK January monthly GDP +0.8% vs +0.2% m/m expected
Markets:
- EUR leads, JPY lags on the day
- European equities higher; S&P 500 futures up 1.4%
- US 10-year yields up 0.9 bps to 2.018%
- Gold down 1.5% to $1,965
- WTI up 0.6% to $106.67
- Bitcoin up 1.6% to $39,958
If there needs to be any clearer indication that we are still trading war headlines, this would do it.
Markets had been a bit fickle-minded in the past few days but risk trades jumped during the session after Russian president Putin noted "certain positive shifts" in Ukraine talks.
Equities moved higher, bond yields jumped, the euro gained, and gold fell. It is your straightforward peace trade playbook.
The DAX is now up 3.5% with the CAC 40 up 2.6%, brushing aside yesterday's poor showing. Meanwhile, US futures moved up from 0.4% higher to 1.4% higher currently.
10-year Treasury yields also made its way back above the 2% mark while we saw gold fall from $1,990 to $1,965 after the news.
In FX, the euro was the biggest beneficiary with EUR/USD moving up from 1.0980 to 1.0940 before settling just above 1.1000 now. The yen remains a notable laggard as USD/JPY briefly clipped above 117.00 and is holding just below that.
The aussie and kiwi failed to find much reprieve though with AUD/USD down 0.4% to 0.7325 and NZD/USD down 0.2% to 0.6848 but off earlier lows at least.
We'll now see if there will be any follow through to the headlines above but as mentioned here, there's still quite a number of questions left to be answered despite the optimistic turn.
