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White House envoy says US, Russia agreed on Ukraine security pledges — Bloomberg

US special envoy Steve Witkoff on Sunday said that US President Donald Trump and Russian President Vladimir Putin agreed at their summit in Alaska that the United States (US) would be able to offer security guarantees to Ukraine, Bloomberg reported on Sunday.

“We were able to win the following concession: That the United States could offer Article Five-like protection, which is one of the real reasons why Ukraine wants to be in NATO,” Witkoff said Sunday. 

According to Witkoff, the deal did not enable Ukraine to achieve its goal of NATO membership, with Putin objecting to NATO admission. A senior Russian diplomat stated that any future peace agreement on Ukraine must provide security guarantees to Kyiv but also to Moscow.

Investors will closely monitor a meeting between Trump and Ukraine Volodymyr Zelenskiy later on Monday as details from the US-Russia talks remain unclear.

Market reaction

At the time of writing, the Gold price (XAU/USD) is trading 0.04% lower on the day to trade at $3,335. 

Risk sentiment FAQs

In the world of financial jargon the two widely used terms “risk-on” and “risk off'' refer to the level of risk that investors are willing to stomach during the period referenced. In a “risk-on” market, investors are optimistic about the future and more willing to buy risky assets. In a “risk-off” market investors start to ‘play it safe’ because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.

Typically, during periods of “risk-on”, stock markets will rise, most commodities – except Gold – will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a “risk-off” market, Bonds go up – especially major government Bonds – Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.

The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are “risk-on”. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.

The major currencies that tend to rise during periods of “risk-off” are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world’s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them – even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.

Author

Lallalit Srijandorn

Lallalit Srijandorn is a Parisian at heart. She has lived in France since 2019 and now becomes a digital entrepreneur based in Paris and Bangkok.

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