At Any Rate Global FX, Commodities and EM: Implications of Russia-Ukraine cease-fire
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Feb 14, 2025 Recent developments regarding the Russia-Ukraine ceasefire could dramatically shift commodities and FX markets. Discussions highlight how fluctuating oil demand may lead to a recovery in natural gas markets. The potential economic impact on gas prices and the euro-dollar exchange rate is analyzed, alongside the dynamics for small open economies and the Swiss franc. The geopolitical landscape could also influence trade ideas and investor sentiment, underscoring a world in search of stability amid ongoing tensions.
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Ceasefire Prediction
- Natasha Kaneva's early call for a 2025 ceasefire in the Russia-Ukraine conflict has proven prescient regarding oil markets.
- This prediction factored into JPMorgan's oil projections, anticipating a dip and recovery tied to the conflict's resolution.
Ceasefire's Impact on Energy Markets
- While a ceasefire would minimally impact oil, it could significantly affect European natural gas.
- Resuming Russian gas flows, even partially, is a sensible move for both Europe and Russia financially.
Euro-Dollar Dynamics and Ceasefire
- A Russia-Ukraine ceasefire, with resumed gas supplies, could boost the euro against the dollar by 3-5%.
- However, ongoing tariff threats, particularly concerning VAT, limit the euro's potential upside.