Sentiment Slightly Improves Following Zelensky - Biden Call
14 February 2022
Equity indices declined somewhat during the London session, but the overall sentiment in the markets seemed a bit positive on Monday.
During their Sunday phone call, Ukraine's President Zelensky asked Biden to visit Kyiv in person amid continuing White House claims that a Russian invasion is set to happen "any day" now.
Saying that major Ukrainian cities are "under safe protection," Zelensky suggested that a visit of the US president in person would stop the spread of panic and prevent escalation.
"I am convinced that your visit to Kyiv in the coming days... would be a powerful signal and help stabilize the situation," Zelensky was quoted as saying in the call. Many observers and commentators have stated that everybody calls for a war between Russia and Ukraine, except Russia and Ukraine.
US yields advanced higher on the day, erasing their Friday losses. The 2-year yield rose toward 1.6%, while the 10-year yield tried to get back above the important 2% threshold.
From other news, ECB President Christine Lagarde is due to testify on the ECB Annual Report before the European Parliament in Strasbourg. She could try to talk down the recent hawkish shift in the ECB, although the March meeting will be the key event heading into the remaining part of this. At its February meeting, the central bank said it would recalibrate monetary policy in March, while the markets are now pricing in two rate hikes in 2022.
Lastly, Federal Reserve Bank of St. Louis President James Bullard will discuss monetary policy in an interview conducted by CNBC. His remarks will be closely watched as he advocates a 50bps rate hike in March, along with other 50 bps of rate hikes by July.