Mood lightens on news of Russia-Ukraine talks
Stock markets in Europe are driving higher on the news the Russian government and Ukraine have agreed to talks. Traders are snapping up stocks as they are taking the view that “jaw jaw is better than war war”. The fact the Kremlin has agreed to negotiations suggests they are open to the prospect of halting military action – something that would be warmly welcome by the people of Ukraine, and the financial markets. The sentiment in the markets today is one of cautious optimism as dealers are banking on the view there will be a quick political solution to the bloodshed, but there are no guarantees that such as an outcome will be achieved. For the second day in a row, the FTSE 100 outperformed in Europe as it fell the least yesterday, and it has rallied the most today. The German economy is overly reliant on natural gas from Russia, so rumblings in regards to the Kremlin, often puts pressure on the DAX. The British market is firing on all cylinders as the banking, energy and mining sectors are booming.
Gold has pulled back from its 17-month high as much of the fear that dominated the mood yesterday has evaporated. The yellow metal is back below the $1900 mark as safe haven trades are far less popular today. It says a lot about gold that it is in the red even though the US dollar has lost 0.3%. Typically, such a move in the dollar would have assisted the asset. The drop in the greenback is similar to gold, whereby it benefitted from the safe-haven trades amid the turmoil of the war in Eastern Europe. WTI has cooled as the announcement about talks between Russia and Ukraine has eased concerns about a possible energy shortage.
