Trump is set to meet with Putin next week to discuss the ongoing conflict between Russia and Ukraine. Afterwards, there will be a three-way meeting with Zelensky, aiming to find a way to end the conflict. The White House made this announcement, but Trump did not share more details on social media. If a resolution is reached, it could have various economic effects.

Possible Economic Impacts

A peaceful solution could boost risk assets and lower energy prices, especially for oil and natural gas. This would depend on an anticipated return of Russian supplies to Europe and better geopolitical stability. European stocks, the euro, and other European currencies might see a boost from improved economic sentiment and lower energy costs. However, the economic impact will depend on the specifics of the peace deal, any easing of sanctions, and how credible the plan for lasting stability is. With news of a potential summit next week, we are preparing for a major change in market sentiment. The main focus is on risk, driven by hopes of resolving the long-standing conflict in Ukraine. This situation could lead to significant market volatility, creating opportunities for those ready to act soon. Energy markets will feel the most direct impact. A believable peace deal could see Russian oil gradually reenter the global market, pushing prices lower. We are considering buying put options on October WTI crude futures, which have been above $85 per barrel, and shorting European natural gas contracts, as prices near €45 per megawatt-hour could drop sharply.

Global Market Reactions

European assets are likely to benefit the most from reduced geopolitical risk and lower energy prices. We are looking to invest in Euro STOXX 50 futures, which have mostly been stagnant this summer. Additionally, call options on the EUR/USD pair are appealing, especially as the currency struggles to stay above 1.10 for most of 2025. This positive sentiment should also spread to other risk assets. We expect a rally in U.S. indices, similar to sharp market jumps we saw during ceasefire rumors in 2022 and 2023. Long-dated call options on the S&P 500 or Nasdaq 100 could offer leveraged exposure to this potential upside. However, the results are uncertain, and a failed summit could lead to a significant market sell-off. The VIX, which measures market volatility, has risen to over 17 from its recent lows, showing increased market anxiety. It would be wise to hedge any bullish positions by buying some out-of-the-money puts on major indices. In the next two weeks, the key will be to trade on the initial wave of optimism while being flexible. Early headlines are likely to push markets higher, but the details of any agreement will determine if the upward trend continues. We need to be ready to change our positions if the terms seem unstable or if sanctions relief is minimal. Create your live VT Markets account and start trading now.

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