Just two days after Ukraine’s Volodymyr Zelenskiy clashed with Trump and cut short a visit to Washington, British prime minister Keir Starmer said on Sunday that European leaders had agreed to draw up a Ukraine peace plan to present to the US.
“The clash between Ukraine’s president Zelenskiy with the US president Trump and vice-president Pence adds to uncertainty about the possibility of reaching a peace deal,” analysts at Erste Group said in a note.
Ukraine’s international hard currency bonds tumbled early on, with the 2036 maturity sliding more than 2 cents on the dollar, Tradeweb data showed.
Uncertainty around tariffs, meanwhile, remained front and centre after US commerce secretary Howard Lutnick stated over the weekend that tariffs on Canada and Mexico would go into effect tomorrow, but that Trump would determine whether to stick with the planned 25% level.
The Mexican peso, which trades round the clock, was last up 0.3% against the dollar.
Trump’s proposal to impose 25% tariffs on imports from the EU is likely to dent growth prospects in Central Europe, compounding existing fiscal challenges, S&P Global Ratings told Reuters.
Euro pairs of emerging Europe currencies traded largely range-bound in the lead up to a likely interest rate cut by European Central Bank later this week.
In Asia, China’s offshore yuan hovered near its lowest level in more than two weeks, with a plethora of developments likely influencing investors.
Trump’s additional 10% tariffs on Chinese goods will come into effect on March 4, while China is studying relevant countermeasures, state-backed Global Times said today.
However, investors took some comfort from data that showed China’s manufacturing activity expanded at the fastest pace in three months in February.
The annual gathering of China’s parliament starts on March 5, in which Beijing is expected to unveil key economic goals and its policy agenda for this year.
MSCI’s gauges for EM stocks and currencies were both flat, coming off a subdued February.
Global markets will also track US jobs data due on Friday on growing concerns of the American economy’s health, with traders ramping up bets of greater monetary policy easing by the Federal Reserve this year.