Ukraine’s government is set to sign a minerals agreement with the United States following a relaxation of U.S. revenue demands.

The deal includes provisions for Ukraine to establish a fund, allocating 50% of proceeds from state-owned mineral resources to local project investments.

Notably, the agreement does not incorporate any security guarantees from the U.S. and remains subject to approval by Ukraine’s parliament.

This development has had a positive influence on the euro and overall market sentiment.

This move brings a moment of reassurance for currency traders, as it offers some predictability in an otherwise tense market environment. The euro’s moderate rise reflects optimism about Kyiv’s resource sector attracting more foreign interest. While the lack of security guarantees keeps broader geopolitical risks in play, this agreement suggests that Washington is prioritising economic cooperation over direct military commitments. That distinction matters. Investors reading the signals will note a shift towards fostering long-term partnerships rather than immediate defence provisions.

The structure of the fund—diverting half of revenues from state-controlled mining towards local projects—adds a domestic economic boost to the equation. It is a deliberate step to ensure that resource wealth does not flow entirely outward, reinforcing local economic activity. Naturally, this raises questions about how efficiently funds will be allocated, but for now, the immediate takeaway is stability. That alone diminishes some of the war-driven uncertainty hanging over the region.

Market optimism around this agreement extends beyond just currency movements. Risk sentiment has improved, evident from how trades are positioning in response to this development. Liquidity movements suggest a growing willingness to engage with assets exposed to Europe’s economic trajectory. Given that the dollar had previously gained from uncertainty in Eastern Europe, this shift is worth tracking. A softer stance from U.S. negotiators likely contributed to this improved outlook, as harsher revenue demands might have deterred Kyiv from signing at all.

The parliamentary hurdle remains, and approval is not a mere formality. Political tensions within Ukraine could introduce delays or modifications, adding a potential inflection point to monitor. However, assuming it moves ahead without major amendments, this deal signals an intent to strengthen economic ties with Washington without deepening security dependencies. That is not lost on market participants.

Consider the broader backdrop. European assets had been under pressure due to concerns about prolonged instability in Ukraine. By securing closer mineral cooperation with the U.S., Kyiv presents an image of economic resilience—something that had been lacking in recent months. This does not erase the structural risks facing the region, but it does inject a needed source of confidence for those weighing positions linked to European growth.

With this in mind, we account for shifting positions in commodities, bonds, and equities exposed to these developments. The weeks ahead will reflect how much of this optimism holds once the finer details of implementation are scrutinised. Watch for fluctuations in European sentiment gauges, alongside any parliamentary resistance, to gauge whether this momentum has staying power.

The Pound Sterling rose during the North American session after briefly hitting a two-day low of 1.2605. The movement was driven by a weakening US Dollar, influenced by falling Treasury yields which saw the 10-year note drop 10 basis points to 4.30%.

Concerns around trade emerged as the US President reiterated tariffs on Canada and Mexico. Additionally, UK retailers indicated plans to reduce investment due to declining consumer spending. A poll showed that 65 economists expect the Bank of England to maintain rates at 4.50% in March.

In the technical outlook, GBP/USD remains neutral to upward as it trades above the 100-day Simple Moving Average at 1.2648, with a potential rise towards 1.2700. Conversely, a drop below 1.2600 might lead toward support at 1.2549.

With the Pound strengthening against the weaker Dollar, traders should take note of the shifting bond market. The retreat in US Treasury yields reflects changing investor sentiment, making the Dollar less appealing. The 10-year yield sliding from earlier levels suggests that money is moving out of bonds, which could mean more volatility ahead. Those trading derivatives should be mindful of this, as lower yields often coincide with a less aggressive stance from the Federal Reserve.

Trade policy is another area demanding attention. The US President’s renewed stance on tariffs concerning Canada and Mexico brings uncertainty to markets, particularly those sensitive to trade flow disruptions. The broader implications could extend beyond immediate currency fluctuations, affecting supply chains and growth forecasts. Meanwhile, UK businesses have signalled hesitation, trimming investment plans as purchasing power weakens. A slowdown in consumer activity could place more pressure on policymakers, influencing rate discussions in the months ahead.

As for monetary policy, analysts widely expect interest rates in the UK to stay at 4.50% when the Bank of England meets in March. Given the central bank’s dual focus on inflation control and economic stability, any shift in this view could have a direct effect on the Pound. If inflation proves more persistent than expected, this could prompt rates to remain higher for longer, potentially supporting Sterling.

Technically, GBP/USD looks supported by the 100-day Simple Moving Average around 1.2648, keeping an upward bias intact. Should momentum continue, a move toward 1.2700 is possible. However, the pair remains sensitive to shifts in sentiment, and a drop below 1.2600 would expose further downside towards 1.2549. Traders positioning for movements in either direction should be cautious of changing risk appetite in global markets.

Thomas Barkin of the Richmond Fed noted that federal layoffs could affect regional economies, although they constitute only 2% of the national job market. He mentioned that consumer confidence tends to vary with political affiliation, while small business confidence has seen an upward trend.

Business and consumer confidence are vital to the overall economic environment. Barkin advised a careful approach, suggesting a preference for clearer indicators about the economy and inflation before final decisions are made, even if this could result in slower reactions.

Thomas highlighted how job losses in the public sector might weaken local economies, even though, on a nationwide scale, these positions make up just a small fraction of total employment. What matters more is how people and businesses feel about economic conditions. He pointed out that people’s political views influence how optimistic or pessimistic they are, meaning confidence levels are not always tied to actual financial data. Meanwhile, smaller companies have reported brighter expectations, suggesting a degree of resilience in that sector.

We acknowledge his view that waiting for stronger signs of where inflation and economic growth are heading could help avoid missteps. Acting too soon in response to unclear signals carries the risk of either tightening too much or not enough, both of which could bring unwanted consequences. This lean towards patience suggests that policymaking is unlikely to make abrupt shifts unless incoming data strongly supports such a move.

Recent employment data adds another layer to this. Labour markets have remained stable, but there are hints of softening in some areas. Wage pressures, while still present, are not escalating at the pace seen in previous periods of economic expansion. This moderation aligns with broader evidence that inflation has eased somewhat, though not yet to a point that would justify a complete shift in policy stance. If hiring slows further, discussions about possible adjustments will likely grow louder.

On the business front, expectations about future demand remain mixed. Some industries continue to see healthy levels of activity, while others face headwinds from higher borrowing costs and shifts in consumer behaviour. There is also the question of credit conditions. Lending standards have become stricter, which could influence investment decisions in the months ahead. If borrowing becomes more difficult, firms might hold back on expansion plans, impacting employment and broader economic trends.

Taken together, these elements suggest a period where markets will be attuned to any fresh data that confirms or challenges these trends. The potential impact of public sector job reductions, changing confidence levels, and shifts in employment dynamics will all shape expectations. Every new report on inflation, hiring, and spending will be closely examined, as each carries weight in determining how conditions unfold.

In the fourth quarter, Mexico’s current account to GDP ratio rose to 2.87%, a considerable increase from the previous figure of 0.16%. This shift indicates a significant change in Mexico’s economic status within that timeframe.

Several financial instruments are currently being monitored closely. For instance, the AUD/USD pair has fallen near 0.6330 as the Reserve Bank of Australia lowered its official cash rate to 4.10%.

Meanwhile, the EUR/USD surpassed the 1.0500 mark amid concerns regarding the US economy. Gold prices have also declined below $2,900 per ounce, reflecting ongoing market corrections.

In the crypto market, Bitcoin traders experienced over $746 million in liquidations recently, exacerbated by developments related to meme coins and significant hacking incidents.

Additionally, there are expected impacts from Germany’s elections and Fed comments, which may influence market sentiment as February draws to a close.

Mexico’s current account ratio jumping from 0.16% to 2.87% in just a quarter is not something that happens without broader economic shifts. What we’re looking at is a balance of payments that has swung rather quickly, likely due to changes in trade flows or capital movements. A move of this scale suggests that underlying economic conditions changed, and traders should take note.

On the currency front, the Australian dollar has been struggling, falling near 0.6330 after the Reserve Bank of Australia decided to lower its cash rate to 4.10%. Rate cuts tend to weaken a currency, as lower yields make investments less attractive. If the downward pressure continues, it could affect expectations going forward.

Then there’s the euro, which has climbed past 1.0500 against the US dollar. This movement appears tied to growing concerns around the American economy rather than independent euro strength. When sentiment shifts like this, it’s often worth watching how central banks respond, as policy decisions could push this further.

Gold is another area that has seen a noticeable shift, dropping below $2,900 per ounce. Given that gold is often a haven asset, this suggests adjustments are being made in response to either confidence in riskier assets or changes in inflation expectations. A continued slide would point to investors seeking opportunities elsewhere.

Turning to crypto markets, Bitcoin’s latest volatility has triggered over $746 million in liquidations. A mix of speculative trading around meme coins and security breaches has fuelled this. Large liquidations in such a short span tend to add pressure, making price swings more erratic.

Beyond that, there are additional factors that may shape price actions across various markets. With the closing days of February in sight, outcomes from Germany’s elections could influence economic policies, and any fresh remarks from the Federal Reserve might have an impact on investor sentiment. Timing these shifts correctly could be key in the coming sessions.

The US Treasury plans to auction $70 billion in 5-year notes today. The previous day’s auction of 2-year notes saw strong demand, with indirect buyers garnering 85% of the total offered.

In this auction, bids were submitted at -1.1 basis points below the when-issued level, indicating robust interest. The upcoming auction of 5-year notes will be assessed against the six-month averages.

Key figures for comparison include a 0.1 basis point tail, a bid-to-cover ratio of 2.40X, 19.2% from domestic demand, 68.6% from international demand, and 12.3% from dealers.

A sizeable five-year note auction lies ahead, following an earlier sale that attracted strong interest. Yesterday’s auction, which involved two-year notes, demonstrated a noticeable level of engagement from indirect participants. These buyers, often understood to be foreign institutions, absorbed the vast majority—85%—of what was made available. The pricing also revealed demand strength, as winning bids came in slightly richer than the initial trading level. This suggests buyers were willing to accept a slightly lower yield in order to secure allocation.

Today’s auction will likely be measured against recent benchmarks. To provide context, six-month averages tell a story of consistent demand patterns. The bid-to-cover ratio, which shows how much demand exists relative to supply, has hovered around 2.40 times. A lower figure would indicate weaker interest, while a notably higher ratio could suggest heightened competition among bidders.

Looking at past participant makeup, domestic bidders have typically contributed just under a fifth of total allocations, while international buyers have taken a considerably larger portion—nearly 69%. Dealers, often stepping in when other bidders fall short, took just over 12% on average. If today’s results shift away from these levels, it may raise questions about sentiment among various buying groups.

Markets are watching closely. Large auctions provide critical signals about investor appetite, and shifts in participation could reveal changes in positioning among key players. While a strong auction may reaffirm confidence in demand for government securities, any softness could stir discussions about future yield expectations, upcoming policy adjustments, or shifting preferences among global investors. Every detail—whether it’s a bid-tail deviation or a swing in buying patterns—matters when piecing together the larger view.

With supply entering markets amid ongoing discussions about monetary direction, today’s outcome stands to offer clarity. The balance between domestic and international demand, coupled with broader investor willingness to absorb new issuance, remains a focal point. Just as yesterday’s auction gave insight into short-term appetite, today’s will help shape the conversation for longer-dated securities.

EUR/USD has risen to near 1.0500 during North American trading hours as the US Dollar weakens amidst concerns over a potential global trade war. The US Dollar Index dipped to approximately 106.45 after President Trump announced his tariff plans for Canada and Mexico remain unchanged.

The upcoming US Durable Goods Orders and Personal Consumption Expenditures Price Index data points are significant for the US Dollar, with focus on the PCE inflation data due to Federal Reserve officials’ concerns around disinflation. Additionally, February’s US Consumer Confidence data is expected later today.

The Euro has strengthened despite uncertainty surrounding the upcoming coalition government in Germany, led by Frederich Merz. Merz’s attempts to uplift the German economy face challenges, particularly with fears of tariffs from the US looming.

Eurozone Q4 Negotiated Wage Rates decreased to 4.12%, down from 5.43% previously. This decline could influence expectations for European Central Bank interest rate cuts amid decelerating wage growth.

EUR/USD technical analysis indicates a minor bullish trend, supported by the 50-day Exponential Moving Average at about 1.0440. Key support lies at the February 10 low of 1.0285, while the December 6 high of 1.0630 presents a resistance barrier.

The upward movement of EUR/USD towards the 1.0500 mark reflects weakness in the US Dollar, largely driven by concerns that trade tensions could escalate. The drop in the US Dollar Index to 106.45 came after Donald reaffirmed that tariffs on Canadian and Mexican exports would remain unchanged, keeping market unease elevated.

The upcoming economic releases from the US will likely shape market sentiment further. The Durable Goods Orders report will provide insight into business investment trends, while the PCE Price Index carries weight due to its relevance in shaping the Federal Reserve’s stance on inflation. Recently, policymakers have expressed worries about disinflation, making the PCE data especially important. Additionally, consumer confidence figures for February will offer clues on household sentiment, which is vital for gauging future spending patterns.

On the European side, the Euro has strengthened even as uncertainty surrounds Germany’s incoming coalition government. Frederich’s efforts to revitalise Germany’s economy face hurdles, with US tariff threats causing further concern. The recent drop in Eurozone Q4 Negotiated Wage Rates from 5.43% to 4.12% raises questions about future wage growth, which could impact expectations for European Central Bank rate cuts. Slower wage increases often translate into weaker inflation pressures, which may prompt policymakers to consider easing monetary policy sooner than previously expected.

From a technical standpoint, EUR/USD maintains a somewhat positive trajectory. The 50-day Exponential Moving Average, currently around 1.0440, acts as a support level, reinforcing the pair’s short-term stability. Should the pair decline, the February 10 low of 1.0285 stands as an important downside level to watch. On the upside, resistance appears near the December 6 high of 1.0630. A move beyond this threshold might encourage traders to target higher levels, while a failure to sustain gains could lead to renewed selling pressure.

For those involved in derivative markets, all of these factors present opportunities as volatility persists. With inflation-related data approaching and political risks in focus, shifts in expectations around interest rates could drive fluctuations. The near-term outlook hinges on upcoming catalysts, particularly how traders interpret economic data against central bank positioning. As we gauge these developments, attention must remain on technical signals alongside policy changes to navigate price movements effectively.

UK Prime Minister Keir Starmer has stated that the increase in defence spending presents a chance to strengthen Britain’s industrial base. He noted that this investment could enhance job creation and economic growth across the country.

Additionally, Starmer mentioned a recent discussion with French President Emmanuel Macron. He plans to host multiple leaders for a meeting scheduled for Sunday.

Keir emphasised that higher defence expenditure is not just about national security but also an opportunity for local industries. By directing funds towards manufacturing and technological development, the government aims to stimulate growth in multiple regions. This approach aligns with previous efforts to reinforce production capacity and reduce reliance on external suppliers.

During his conversation with Emmanuel, there was a focus on cooperation between the UK and France. Defence partnerships have always been a key part of their relationship, and ongoing discussions suggest an interest in expanding joint projects. The upcoming meeting on Sunday will bring additional voices into the fold, providing a platform for broader engagement.

We have seen that such gatherings often serve as a signal of policy direction. Increased spending in this sector is more than a statement of military intent; it influences supply chains, workforce demand, and technological investments. If plans move forward as outlined, related industries should experience higher activity in the short term.

At the same time, discussions with European counterparts indicate a willingness to collaborate more closely. This has potential financial implications, particularly for firms involved in cross-border ventures. As more details emerge, observing how these relationships develop will help in assessing the likely market response.

With these factors in play, the coming weeks should provide clearer indications of how funds are allocated and which industries stand to benefit. Given the nature of government contracts and strategic partnerships, any immediate shifts in strategy at the leadership level are likely to generate ripples across multiple sectors.

In December, the United States Housing Price Index showed a month-on-month increase of 0.4%, exceeding the forecasted 0.2%. This growth suggests a stronger-than-expected performance in the housing market.

Concerns about US tariffs have impacted the AUD/USD, which has been on the decline for three consecutive days. The pair approached the 0.6320 zone, reflecting a bearish sentiment.

Meanwhile, the EUR/USD has seen consolidation, surpassing the 1.0500 mark amid scepticism surrounding the US economy. Gold prices have dipped below $2,900, influenced by broader trends in the US dollar and yields.

In the crypto sector, Bitcoin traders faced substantial liquidations, totalling over $746 million within a day. Recent events linked to meme coins and a major hack have further destabilised the market.

The upcoming week will focus on comments from various political figures, particularly relating to Germany’s elections and statements from Trump. These developments may overshadow some economic figures, although attention will remain on the Fed’s preferred inflation metrics.

A closer look at December’s US Housing Price Index reveals some strength in the housing sector, with the increase of 0.4% doubling what was initially anticipated. A movement like this suggests that housing demand remains more resilient than expected, which can, in turn, influence inflation expectations and policymakers’ decisions moving forward. If house prices continue to rise, there is always the potential for pressure on mortgage rates and overall borrowing conditions, something that will deserve further observation in the weeks ahead.

Shifting to currency markets, the Australian dollar has been under pressure, particularly against the US dollar, as concerns about tariffs continue to weigh. The decline over three consecutive days underscores how sentiment has taken a negative turn, with 0.6320 being tested as traders evaluate whether this level will hold or if further downside movement is on the horizon. External factors tied to trade policies are adding another layer of uncertainty, which means that volatility in this pair could persist for a while yet.

For the euro, the situation has been more stable, with the common currency consolidating and even managing to climb past 1.0500. There remains uncertainty surrounding US economic momentum, which has given a slight boost to the euro in recent sessions. However, movements in EUR/USD will not be immune to developments in the United States, especially as inflation figures and central bank commentary begin to take shape. It remains to be seen how long the market maintains an attitude of caution.

Gold has struggled as markets increasingly look to the US dollar and yields for guidance. A decline beneath $2,900 reflects how strength in Treasury yields can pull capital away from non-yielding assets like gold, forcing prices lower. If the current trend continues, further tests to the downside remain possible, especially if upcoming inflation data reinforces expectations of prolonged tight monetary policy. Looking ahead, shifting risk sentiment has the potential to dictate the next direction.

Within digital assets, Bitcoin traders endured another sharp round of liquidations, with more than $746 million being wiped out within just 24 hours. The impact of this has only been worsened by recent disruptions caused by meme coin movements and security breaches, both of which have rattled those participating in digital markets. Although crashes like these are part of Bitcoin’s history, the scale of losses shows how rapidly sentiment can shift in the absence of stability. With volatility still very much in play, traders will need to assess technical levels carefully before making further commitments.

Attention in the coming days will largely centre on various political statements, particularly around Germany’s elections and Trump’s latest remarks. Political risk has the ability to divert focus away from traditional drivers like economic data, but it will not make inflation readings irrelevant. With the Federal Reserve’s preferred inflation metric still on the agenda, it would be premature to assume that market reactions will be solely dictated by political headlines. The balance between politics and economic indicators will decide where markets move from here, and staying ahead of both will be necessary.

Stournaras from the ECB stated that it is premature to consider pausing rate cuts and advocates for reductions until rates reach 2%. He believes current rates are excessively restrictive.

Contrarily, Schnabel expressed that existing financing conditions do not severely limit consumption and investment. She indicated that the inflation process has likely undergone structural changes and that the eurozone’s natural rate of interest has increased notably over the last two years, suggesting prolonged high rates.

Nagel endorsed a careful approach to monetary policy, advising against hasty rate cuts. He acknowledged a positive inflation outlook but stressed the necessity for ongoing attention to core and services inflation.

Stournaras’ stance is clear. He sees the current interest rate levels as too tight and believes further reductions are needed until they settle at 2%. In his view, borrowing costs are still too high, which could be restraining economic activity more than is necessary. If his perspective gains traction, we might expect continued cuts in the near term, barring any unexpected shifts in inflation data.

Schnabel, however, does not share this sentiment. She argues that credit conditions are not severely hindering spending or investment. More importantly, she suggests that the natural rate of interest—the theoretical rate at which monetary policy neither stimulates nor slows the economy—has moved upwards. The implication is straightforward: if the neutral rate is now higher than before, keeping borrowing costs elevated for longer may be justified. This would mean interest rates could remain high without necessarily being viewed as overly restrictive, which challenges the need for rapid easing.

Nagel takes a measured position. While he acknowledges progress on inflation, he insists on close monitoring of core and services inflation before making any further moves. His words suggest a preference for waiting to see if inflation continues its downward path rather than making swift decisions. He is not outright rejecting rate cuts, but he is clearly resisting any sense of urgency in bringing them forward.

The divide in opinion is obvious. Some policymakers lean towards further reductions to avoid excess strain on economic activity, while others believe higher rates may be justified for longer. If Stournaras’ argument gains influence, pressure for easing could build. If Schnabel and Nagel shape the debate, any cuts could be slower and more calculated, potentially dragging out the adjustment period.

For those dealing with forward-looking decisions influenced by interest rates, the message is clear: policymakers are not aligned, and that disagreement matters. It introduces uncertainty around the speed and scale of future moves, which makes adaptability essential. The coming weeks may bring new remarks or economic indicators that tilt the argument one way or the other. Staying nimble will be critical.

In December, the S&P/Case-Shiller Home Price Indices increased by 4.5% year-on-year, aligning with forecasts. This data provides insight into the current state of the housing market in the United States.

The AUD/USD currency pair faced downward pressure, nearing the 0.6320 level due to concerns over US tariffs. Meanwhile, EUR/USD exceeded the 1.0500 mark as selling interest in the US Dollar increased amid economic uncertainties.

Gold prices fell below $2,900, reflecting a corrective movement despite a general decline in US yields. The crypto market saw substantial liquidations, with over $746 million involving Bitcoin.

As February concludes, key areas of focus include the fallout from Germany’s elections and comments from Trump on trade matters.

The latest housing data shows that prices continue to rise at a steady pace, which suggests demand remains strong. This is exactly what we expected, so there are no surprises there. A solid housing market can often be a sign of economic resilience, though it’s worth remembering that home price movements tend to lag behind shifts in economic conditions.

In the currency space, downward pressure on the Australian Dollar has been clear, mainly due to concerns about US trade policies. The fact that it is nearing 0.6320 suggests traders are wary of further instability. Elsewhere, the Euro has gained ground against the US Dollar, moving past 1.0500. This increase was helped by growing doubts around the US economy, pushing traders to reduce their exposure to the greenback.

Gold’s sharp drop below $2,900 stands out, especially since lower US yields usually support precious metals. However, given the price’s previous run-up, this move seems to be more of a natural correction than a broader shift in market sentiment. Meanwhile, the cryptocurrency market has experienced widespread liquidations, wiping out more than $746 million in Bitcoin alone. Such large-scale liquidations often indicate either misplaced optimism or a sudden shift in positioning.

Looking ahead, we need to keep a close watch on the impact of recent election results in Germany, which could influence wider European market sentiment. In addition, any trade-related remarks from Donald could introduce fresh volatility across assets. His comments have the potential to move markets quickly, particularly in areas sensitive to tariff discussions.

With these developments unfolding, traders in derivatives markets should remain adaptable. Whether it’s currencies, commodities, or cryptocurrencies, large price swings remain a risk. Everyone should be prepared for potential shifts as political events and economic data continue to shape expectations.