Global investors are eyeing defence and energy sectors as European leaders rally behind Ukraine amid signs the U.S. may push Kyiv to accept a peace deal favourable to Russia.
Markets are facing a turbulent week as geopolitical risk rises over Ukraine, with President Volodymyr Zelenskyy set to meet U.S. President Donald Trump in Washington on Monday. European leaders, including those from Germany, France and the UK, will also attend, seeking to strengthen Ukraine’s hand in the talks.
Trump, fresh from a summit with Russian President Vladimir Putin in Alaska, said on Saturday that he wanted a “rapid” peace deal — comments that analysts see as increasing pressure on Kyiv to concede territory in exchange for an end to the war.
“Trump seems inclined to reduce or even end U.S. support for Ukraine. Putin got him interested in business deals,” said Berenberg Chief Economist Holger Schmieding in a client note. “The U.S. may lift its sanctions on Russia and invest in Russia instead. Europe will have to spend a lot more for its own defence.”
The geopolitical shift is fuelling speculation about new U.S.-Russia cooperation on Arctic oil and gas projects. Bank of America strategist Michael Hartnett flagged the potential exploitation of 15 % of the world’s undiscovered oil and 30 % of undiscovered natural gas in the region, warning of a possible deep bear market for energy.
Brent crude, which dropped more than 1 % on Friday to trade near $66 a barrel, is still “priced for a Ukraine peace deal,” Hartnett said.
European defence stocks have surged since Russia’s full-scale invasion in February 2022, with shares in Italy’s Leonardo up more than 600 % and Germany’s Rheinmetall gaining 1,500 % over the period.
The euro has also strengthened, up 13 % against the dollar this year, trading around $1.17 on Friday.
Ukraine’s sovereign bonds — a key sentiment barometer — rallied earlier this month as news of the Trump–Putin summit broke but have since stalled at around 55 cents on the dollar. “I would think they will be a bit weaker… the mood seems to favour Russia following Friday’s summit,” said Jeff Grills, head of emerging market debt at Aegon Asset Management.
European leaders are expected to press for strong security guarantees and a clear role for Ukraine in any final settlement during the upcoming talks at The White House.
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Saudi Aramco has ordered staff to evacuate its headquarters amid escalating Houthi attacks on the kingdom. Two people were killed in an attack on Dammam airport, while Iran's IRGC Navy claimed strikes on seven vessels and warned the U.S. of a wider response.
Russian strikes on Ukraine overnight killed at least two people and injured 15 others, including two children, Ukrainian authorities said. Meanwhile, Russia said it had intercepted the vast majority of 630 Ukrainian drones launched towards Moscow.
Russia is willing in principle to resume peace talks with Ukraine and the United States in November, Kremlin aide Yuri Ushakov said after President Vladimir Putin met U.S. special envoy Steve Witkoff in St Petersburg.
Super typhoon Champi is set to batter Japan’s Okinawa Prefecture from Friday (23 October), bringing violent winds, torrential rain and waves up to 11 metres high, as airlines cancel flights and organisers scrap a major festival.
Israeli military bulldozers have begun demolishing buildings in the West Bank city of Hebron on Friday, 23 October, following armed clashes with Palestinians that left two Israeli soldiers dead, according to the Israeli military.
Armenian authorities have detained 10 more people in a vote-buying investigation involving the opposition Strong Armenia party, just two days before local elections in the northern town of Stepanavan.
Azerbaijani President Ilham Aliyev met India’s Minister of External Affairs in Baku for talks on strengthening bilateral relations, with a focus on trade, investment, energy and technology.
Israeli military bulldozers have begun demolishing buildings in the West Bank city of Hebron on Friday, 23 October, following armed clashes with Palestinians that left two Israeli soldiers dead, according to the Israeli military.
Greece’s parliament has passed a bill banning under-15s from using social media from 1 January 2027, as the country steps up efforts to protect children online. The new law will require platforms to enforce age restrictions.
France's Interior Minister Laurent Nunez said on Friday that 70,000 security forces would be mobilised throughout the country to keep order on Saturday, adding there have been calls for looting and violence from the ultra-left.
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