Global markets are reeling as risk sentiment takes a hit following Ukrainian President Volodymyr Zelensky’s rejection of potential US-Russian negotiations. Equities have slipped to fresh lows, with investors treading cautiously amid escalating geopolitical tensions.

Currency Markets: USD Gains, NZD Leads, GBP Steady

The US dollar is slightly firmer as risk aversion creeps in, though movements remain measured. The New Zealand dollar is leading gains in the FX space, buoyed by the Reserve Bank of New Zealand’s (RBNZ) latest policy decision. Meanwhile, the British pound remains contained after mixed UK inflation data, which failed to provide a clear directional bias for traders.

Commodities: Crude Rises, Aluminium Spikes on EU Sanctions

Oil prices are inching higher, reflecting a firming crude market, while aluminium has surged following the European Union’s announcement of its 16th sanctions package against Russia. The latest measures are adding further supply concerns, driving up prices in industrial metals.

Bonds: Gilts Lag, USTs Await Auction, Bunds React to ECB Hawkishness

In the bond space, UK gilts are underperforming following the release of UK CPI data, while US Treasury yields are in focus ahead of a 20-year bond auction and the release of the Federal Reserve’s FOMC meeting minutes. Meanwhile, German bunds have weakened after hawkish remarks from European Central Bank (ECB) official Isabel Schnabel, reinforcing expectations of a more restrictive monetary policy stance in the Eurozone.

Looking Ahead

Markets remain on edge as geopolitical risks, central bank policy signals, and inflationary pressures continue to shape investor sentiment. With key economic data releases and central bank communications ahead, volatility could persist in the days to come.