UPDATE: The United States has just softened its deadline for Ukraine to accept a peace deal with Russia, shifting market attention to a new 19-point agreement set for discussion in the coming days. This pivotal move arrives as geopolitical tensions remain high, prompting urgent reassessments in global markets.
As of today, German Chancellor Merz has indicated a cautious outlook on any immediate breakthroughs, while the Kremlin expresses a cautiously optimistic sentiment. According to Francesco Pesole, an FX analyst, the currency markets have shown limited reactions to the evolving situation, with no significant shifts in high-beta European currencies or pressure on the safe-haven Swiss franc.
In addition to these developments, today’s US economic data is unlikely to provide significant triggers for foreign exchange movements. Analysts predict robust retail sales, yet expect consumer confidence to dip to 93.5, closely aligning with market consensus. Furthermore, the September Producer Price Index (PPI) is anticipated to remain steady at 0.3% month-on-month.
Meanwhile, Federal Reserve officials Chris Waller and Mary Daly have voiced support for potential rate cuts in December, adding to the dovish pressure on the Federal Open Market Committee (FOMC). Although Daly is not a voter this year, her stance reflects a broader sentiment influencing market expectations, with many now pricing in 19 basis points of easing for December. Despite this, the US dollar has shown resilience amidst ongoing year-end rebalancing flows.
As the situation develops, all eyes are on the implications of the peace talks. With Thanksgiving approaching, market activity may thin, but traders should remain alert to any sudden shifts in sentiment regarding the Ukraine-Russia negotiations.
Stay tuned for updates as the peace discussions unfold and further economic data is released. This situation is critical, and the impact on global markets could be profound.
