Global markets gain as US and Russia discuss ending Ukraine war

Global equities advanced as negotiations between US and Russian officials aimed at ending the three-year conflict in Ukraine took center stage. Wall Street looked set to open higher, with futures linked to the S&P 500 climbing 0.3%, while Nasdaq 100 futures gained 0.4% after Monday’s holiday break.

In Europe, the Stoxx 600 index remained near record levels, driven by gains in defense-related stocks such as Rheinmetall AG and Dassault Aviation SA, amid expectations that governments will ramp up military spending. Meanwhile, an index tracking emerging-market stocks reached its highest level in three months.

The prospect of increased defense expenditures put pressure on European bonds, with Germany’s 10-year bund yield, the eurozone’s benchmark borrowing rate, rising to its highest point in over two weeks. As US Treasury markets reopened, 10-year yields climbed by roughly three basis points.

These market moves coincided with Saudi Arabia hosting diplomatic discussions between Russia and the US, potentially paving the way for a future meeting between US President Donald Trump and Russian President Vladimir Putin. In parallel, European leaders are weighing new defense financing plans ahead of a March 20-21 summit.

Investor sentiment toward equities remains broadly positive, with a Bank of America survey revealing that global stocks are currently the most favored asset class among investors. Additionally, cash holdings among fund managers have declined to their lowest levels since 2010, signaling a greater appetite for risk.

Among notable premarket movers, shares of Intel Corp. advanced following a report from the Wall Street Journal that Taiwan Semiconductor Manufacturing Co. and Broadcom Inc. are considering deals that could reshape the US semiconductor industry. On the other hand, Delta Air Lines Inc. slipped after one of its aircraft lost control while landing in Toronto. In European trading, InterContinental Hotels Group Plc saw its stock decline following earnings results.

Attention is now turning back to the Federal Reserve’s monetary policy outlook. Fed Governor Christopher Waller noted that recent economic data supports maintaining interest rates at their current level until there is more progress in controlling inflation. His remarks contributed to the US dollar strengthening against other major currencies.

Further insights from the Fed are expected this week, with officials Mary Daly and Michael Barr scheduled to speak on Tuesday, followed by the release of minutes from the central bank’s most recent policy meeting on Wednesday.

German investor confidence sees biggest jump in two years ahead of elections

Investor sentiment in Germany saw its sharpest improvement in two years, fueled by expectations that upcoming elections will result in a pro-business government and that interest-rate cuts will boost economic demand.

The ZEW Institute reported that its index of economic expectations surged to 26 in February, up from 10.3 in January, exceeding economists’ projections. While the measure of current conditions also rose, the increase was more modest.

“This growing optimism likely stems from hopes for a more effective German government,” ZEW President Achim Wambach said in a statement on Tuesday. “Additionally, after a prolonged period of weak demand, private consumption is expected to pick up over the next six months.”

Economic concerns have been a focal point of Germany’s election debate, with leading candidate Friedrich Merz pledging to stimulate growth through tax reductions, deregulation, and adjustments to social spending. The country, Europe’s largest economy, has contracted for two consecutive years and is forecast to stagnate in 2025.

Germany’s manufacturing sector, which is heavily reliant on exports, has been a major drag on economic performance due to sluggish demand from China, elevated energy costs, and geopolitical uncertainties. While a recent gauge of industrial activity showed some improvement, it continues to indicate declining output.

DXY approaches key support level

The US Dollar Index started the week slightly higher following the long weekend in the US due to President’s Day, reaching a peak of 107.05. However, this rally is likely to be limited, as the next key support level is at 106.40. The time/price method still indicates that the downward movement may not be finished. A break below 106.40 could lead to further declines, potentially down to 106.0 and 105.50 in the near term. On the upside, 107.35 is expected to serve as strong resistance moving forward.

EURUSD testing 1.05 resistance

The Euro attempted to break through the 1.05 resistance level for two consecutive days but was unable to do so, retreating to around 1.0450 earlier today. However, technical indicators remain bullish across most time frames. A successful break above 1.05 could lead to further gains, potentially reaching 1.0550. On the downside, the 1.0400 level should serve as a solid support.

Silver failed to breakout

Silver rallied on Friday to as high as 33.40. However, it failed to sustain these gains and closed the week around $32.15 with a clear reversal candle on the daily chart. However, it managed to hold above 32.0 support on Monday and today, reaching as high as 32.50 so far. Despite the notable decline, the stabilization above 32.0 keeps bulls in control, while a break above 32.50 is still needed to pave the way for further gains ahead. Otherwise, the risk of another leg lower would still be higher.

Prepared by Nour Hammoury, Chief Market Analyst at SquaredFinancial
Nour is an investor, independent market strategist, and financial advisor. He holds a BA in Finance and Banking Science from Al-Ahliyya Amman University and a CFTe in Economics from the International Federation of Technical Analysts. He has more than 15 years of experience in forex, stocks, and global economic developments, as well as central bank policies and intermarket analysis. He appears regularly on major international TV networks, such as BBC, Al-Jazeera, Al Hurra, CNBC, and Bloomberg, holding open discussions and sharing insights and readings of the markets and trends.

Disclaimer
This is a marketing communication and does not contain, and should not be construed as containing, investment advice or an investment recommendation or, an offer of or solicitation for any transactions in financial instruments. Past performance is not a guarantee of or prediction of future performance. The information contained herein does not constitute a personal recommendation and does not consider your personal investment objectives, investment strategies, financial situation or needs. Squared Financial makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on a recommendation, forecast, or other information supplied by Squared Financial.

The information on this site is not intended for any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.