EUR/USD bleeds out the Russian & Ukraine peace talk rally

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EUR/USD bleeds out the Russian & Ukraine peace talk rally By ross_burland EURUSD RussianFederation Ukraine DollarIndex Fed

During the highly anticipated start of fresh peace talks, Russia promised on Tuesday to scale down military operations around Ukraine's capital and north, while Kyiv proposed Ukraine to join the EU while adopting neutral status and not join NATO. The Financial Times had previewed such a proposal on Monday which led to a bout of risk-on during the latter part of the New York session.

''Talks successful enough for a possible meeting between Putin and Zelensky, says Ukrainian presidential advisor Mykhailo Podolyak. “We have documents prepared now which allow the presidents to meet on a bilateral basis," he said. British Prime Minister Boris Johnson said a ceasefire agreement in Ukraine will not be enough to lift British sanctions against Russia. US president, in the same vein, says that the US will keep sanctions strong and help aid Ukraine in its military forces.

Additionally, the analysts explained, ''the 5s30s inversion signals the market concern that the Fed might choose inflation credibility over achieving a soft landing, though it is too early to draw this conclusion. The Fed is sounding hawkish right now, but if growth begins to slow, some of the Fed's urgency to tighten will fade. "Nimble" could become consistent with a pause once the Fed reaches neutral.

 

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