Markets Rise on US Rate Cut Hopes and Ukraine Peace Talks Progress

Emerging market equities and currencies saw gains after expectations of a U.S. interest rate cut and advancements in Ukraine peace talks. U.S. and Ukrainian officials have refined a peace framework, boosting market sentiment. Additionally, Fed comments on the possibility of a December rate cut increased investor risk appetite.

Emerging market equities and currencies experienced an uptick on Tuesday, fueled by potential U.S. interest rate cuts in December and progress in Ukraine peace negotiations. The optimism comes as market indices recover from significant losses the previous week, responding positively to developments in U.S.-Ukraine diplomatic efforts.

The peace talks, held in Geneva, resulted in a refined framework that aimed to address Ukrainian and European concerns over Kremlin-influenced proposals. Ukrainian international bonds benefited, with notable gains in the zero-coupon 2035 bond. Ukrainian President Volodymyr Zelenskiy is expected to visit the U.S. soon to finalize a deal with potential conflict-ending implications.

Supporting the buoyant market sentiment, remarks from Federal Reserve officials suggested a high likelihood of a 25-basis-point rate cut in December due to a softening labor market. As investors raise their expectations for the cut, global equity indices logged moderate gains, although they have yet to reach all-time highs.

(With inputs from agencies.)