Headlines:
- Euro jumps on peace hopes
- Ukraine negotiator: There have been enough developments to have Putin-Zelensky meeting
- Ukraine says suggested new security guarantee in today's talks
- Japan top currency diplomat: Excess volatility, disorderly FX moves are undesirable
- SNB introduces possibility of repo rate transactions being indexed to policy rate
- France March consumer confidence 91 vs 94 expected
- Germany February import prices +1.3% vs +1.8% m/m expected
- Germany April GfK consumer sentiment -15.5 vs -14.0 expected
Markets:
- EUR leads, CHF lags on the day
- European equities higher; S&P 500 futures up 0.7%
- US 10-year yields up 3.7 bps to 2.514%
- Gold down 0.7% to $1,910.20
- WTI down 2.4% to $103.25
- Bitcoin down 0.1% to $47,938
It was a bit of a calm and mixed tone for most of European morning trade but when midday came, the comments from Istanbul are proving to be a potential game changer in the Russia-Ukraine conflict.
Ukraine presented fresh proposals on a new security guarantee system and Russia has responded by taking a step back on military activity in Kyiv and Chernihiv. That's the first real sign of progress since the war began.
The euro had a bit of a back and forth session before jumping higher on the headlines, gaining from 1.1040 to 1.1100 against the dollar.
The greenback is struggling for traction amid a push and pull session. GBP/USD was up to 1.3110 before falling to 1.3050 and is now back up to near 1.3130-40 levels after the headlines above.
AUD/USD is also bolstered as buyers stay in the hunt of a firmer break above the 0.7500 level, up 0.3% on the day to 0.7510.
Amid the optimistic headlines from Istanbul, risk trades are faring well with European indices posting well over 2% gains on the day while US futures are up 0.7%. The bond rout continues as 2-year bund yields turn positive for the first time since 2014 and Treasury yields are also jumping higher still. 2s10s are set for an inversion as well so look out for that in the days ahead.