Ukraine talks increases stocks and facilitates raw materials

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Peace talks between Russia and Ukraine in Turkey see both sides gesturing, boosting stock markets and dropping many agricultural commodities.

  • Peace talks between Russia and Ukraine began yesterday in Turkey, with Ukraine offering to accept its neutrality while working towards EU membership, while Russia pledged it would scale back its assault on kyiv and Chernihiv., although Ukraine is skeptical, Russia will actually implement its announced action. News of the talks helped boost risk sentiment, leading to a rally in equities (particularly in Europe), a rise in the euro and a tumble in several commodities. The ruble has already gained more than 12% against the US dollar during today’s Tokyo session.

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  • The Forex market continued to be dominated by movements in the Japanese yen, which gained strongly despite the third day of intervention by the Bank of Japan aimed at seeing the currency weaken further. The Bank of Japan pledged to buy unlimited JGB bonds at 0.25% after the 10-year yen yield hit 0.245%, the highest rate seen in 6 years. The USD/JPY currency pair fell over 120 pips in today’s Tokyo session after briefly trading at a new 6-year high above ¥125 on Monday.
  • US 5- and 30-year Treasury yields reversed this week for the first time since 2006, which is taken by some analysts to indicate an impending recession. However, the gap between the most closely watched The yield spread between 2 years and 10 years remains healthy.
  • Today will bring a release of the ADP’s forecast for the evolution of non-farm payrolls, which should be 455k new jobs created.
  • US JOLTS job openings data released yesterday is higher than expected, to 11.27 million new jobs compared to the planned 11 million. This suggests that the US labor market remains tight.
  • New daily coronavirus cases around the world fell last week after rising for two consecutive weeks.
  • The major city of Shanghai remains under lockdown due to rising coronavirus cases.
  • An estimated 64.4% of the world’s population has received at least one dose of the coronavirus vaccine, while around 6.1% of the world’s population is known to have contracted the virus at some point.
  • The total number of new confirmed coronavirus cases worldwide stands at over 485.5 million with an average case fatality rate of 1.27%.
  • The rate of new coronavirus infections now only appears to be rising in Australia, Cyprus, France, Italy, Laos, Luxembourg, Malta, Samoa, Taiwan, Tonga, UK and Vanuatu .
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