Russia And Ukraine Agree New POW Swap And Handover Of Bodies

Political

Russia-Ukraine Conflict

Summary:

Russia and Ukraine said they had agreed at peace talks on Monday to exchange more prisoners of war and return the bodies of 12,000 dead soldiers.

The warring sides met for barely an hour in the Turkish city of Istanbul, for only the second such round of negotiations since March 2022.

Turkish President Tayyip Erdogan described it as a great meeting and said he hoped to bring together Russia's Vladimir Putin and Ukraine's Volodymyr Zelenskiy for a meeting in Turkey with U.S. President Donald Trump.

But there was no breakthrough on a proposed ceasefire that Ukraine, its European allies and Washington have all urged Russia to accept.

Moscow says it seeks a long-term settlement, not a pause in the war; Kyiv says Putin is not interested in peace.

Kremlin aide Vladimir Medinsky said Russian negotiators had handed their Ukrainian counterparts a detailed memorandum outlining Moscow's terms for a full ceasefire.

Medinsky, who heads the Russian team, said Moscow had also suggested a "specific ceasefire of two to three days in certain sections of the front" so that the bodies of dead soldiers could be collected.

Each side said it would hand over the bodies of 6,000 dead soldiers to the other.

In addition, they said they would conduct a further big swap of prisoners of war, after 1,000 captives on each side were traded following a first round of talks in Istanbul on May 15.

Ukrainian Defence Minister Rustem Umerov, who headed Kyiv's delegation, said the new exchange would focus on those severely injured in the war and on young people.

Umerov also said that Moscow had handed a draft peace accord to Ukraine and that Kyiv - which has drawn up its own version - would review the Russian document.

Ukraine has proposed holding more talks before the end of June, but believes that only a meeting between Zelenskiy and Putin can resolve the many issues of contention, Umerov said.

Zelenskiy's chief of staff, Andriy Yermak, said Kyiv's delegation had requested the return of a list of children who it said had been deported to Russia.

Moscow says such children were moved in order to protect them from fighting. Medinsky said there were 339 names on Ukraine's list but that the children had been "saved", not stolen.

LOW EXPECTATIONS FOR ISTANBUL BREAKTHROUGH

Ukraine had a day earlier launched one of its most ambitious attacks of the war, using drones to target Russian nuclear-capable long-range bomber planes in Siberia and elsewhere.

Angry war bloggers urged Moscow to retaliate strongly.

While both countries, for different reasons, are keen to keep Trump engaged in the peace process, expectations of a breakthrough on Monday had been low.

Ukraine regards Russia's approach to date as an attempt to force it to capitulate - something Kyiv says it will never do - while Moscow, which advanced on the battlefield in May at its fastest rate in six months, says Kyiv should submit to peace on Russian terms or face losing more territory.

Putin set out his opening terms for an immediate end to the war last June: Ukraine must drop its ambitions to join the Western NATO alliance and withdraw its troops from the entirety of the four Ukrainian regions claimed and largely controlled by Russia.

According to a proposed roadmap drawn up by Ukraine, a copy of which was seen by Reuters, Kyiv wants no restrictions on its military strength after any peace deal, no international recognition of Russian sovereignty over parts of Ukraine taken by Moscow's forces, and reparations.

Russia currently controls just under one fifth of Ukraine, or about 113,100 sq km, about the area of the U.S. state of Ohio.

Putin sent his army into Ukraine on February 24, 2022, after eight years of fighting in eastern Ukraine between Russian-backed separatists and Ukrainian forces.

The United States, which under Trump's predecessor Joe Biden was Ukraine's main source of advanced weaponry in the war, says over 1.2 million people have been killed and injured in the conflict since 2022.

Trump has called Putin "crazy" and berated Zelenskiy in public in the Oval Office, but the U.S. president has also said he thinks peace is achievable and that if Putin delays, the U.S. could impose tough sanctions on Russia.

Source: Reuters

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Gerik

Economic

China–U.S. Trade War

Treasury Market Responds to Renewed Trade Friction

Yields on US government bonds rose modestly on Monday, reflecting mounting investor unease as the US-China trade détente showed signs of unraveling. The 10-year Treasury yield climbed over 2 basis points to 4.445%, while the 30-year yield rose more sharply by over 4 basis points to 4.981%. Shorter-dated notes, including the 2-year Treasury, moved slightly higher at 3.922%. These shifts signal a cautious repricing of risk in fixed-income markets, driven not by economic data, but by geopolitical tension and legal ambiguity surrounding trade policy.

The rise in yields came after China accused the US of breaching the Geneva trade agreement—a 90-day truce that temporarily paused further tariff escalations. Beijing’s rebuttal followed Trump’s Friday statement accusing China of breaking the deal, accompanied by an announcement to double steel tariffs to 50%. This rhetorical exchange suggests that both sides are hardening positions rather than moving toward resolution. While the initial Geneva framework had generated a degree of investor optimism, the tone of current exchanges undermines that earlier confidence.

Legal Volatility Adds Fuel to Market Caution

Further complicating the landscape is the legal uncertainty surrounding Trump's earlier tariffs. The US Court of International Trade struck down a wide swath of those duties last Wednesday, citing procedural violations. However, a federal appeals court temporarily reversed that decision on Thursday, reinstating the contested tariffs for now. This back-and-forth has created an unstable regulatory backdrop, making it increasingly difficult for market participants to price long-term trade policy impacts.

Deutsche Bank analysts noted that the unpredictability of US trade policy, especially under legal review, makes it difficult to forecast near-term developments. They observed that while the peak of tariff aggressiveness may be behind us, persistent uncertainty is likely to cast a shadow over global markets and policymaking.

Monetary Implications: Pricing the Risk Premium

The uptick in yields—especially at the long end of the curve—suggests markets are starting to price in a higher geopolitical and policy risk premium. This is particularly relevant for the 30-year Treasury, where yields rose the most. The yield curve’s modest steepening reflects increased uncertainty about inflation, fiscal policy sustainability, and foreign investor demand for US debt, all of which are sensitive to trade dynamics with China.

Shorter-term rates, including the 2-year yield, have been more stable, suggesting the market continues to expect that the Federal Reserve will remain cautious. Still, Fed officials, including Chair Jerome Powell, are expected to speak this week, and investor focus will likely shift to how the central bank interprets these global trade developments.

Economic Data and Policy Uncertainty Collide

Beyond geopolitics, markets will closely watch upcoming US economic indicators. Chief among them is Friday’s nonfarm payrolls report for May, which will be critical in assessing whether the trade environment has begun to impact hiring and broader economic momentum. If signs of labor market softening emerge, they could challenge the Fed’s ability to stay on hold, especially amid elevated yield levels.

In the interim, the bond market will likely remain volatile as investors digest the legal fate of tariffs, the potential for a Trump-Xi phone call, and the overall durability of the Geneva agreement. With headline risks dominating price action, traditional economic fundamentals may temporarily take a backseat to political theater.

Source: CNBC

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Adam

Economic

U.S. construction spending unexpectedly fell in April, weighed down by a decline in outlays on single-family housing projects amid higher borrowing costs and a rising supply of unsold homes.

The Commerce Department's Census Bureau said on Monday that construction spending dropped 0.4% after a downwardly revised 0.8% decline in March. Economists polled by Reuters had forecast construction spending rebounding 0.3% after a previously reported 0.5% decline in March.

Spending decreased 0.5% year-on-year in April.

Spending on private construction projects slipped 0.7%. Investment in residential construction dropped 0.9%, with outlays on new single-family housing projects declining 1.1%.

Home construction is also being constrained by an unsettled economic outlook amid President Donald Trump's aggressive trade policy, including a recent doubling of steel and aluminum duties to 50% from 25%. New housing inventory is at levels last seen in 2007, while the supply of previously owned homes is the highest in more than four years, leaving builders with limited scope to break ground on new projects.

Outlays on multi-family housing units dipped 0.1% in April. Investment in private non-residential structures like offices and factories eased 0.5%.

But spending on public construction projects increased 0.4%. State and local government spending rose 0.3%, while outlays on federal government projects shot up 2.7%.

Source: Reuters

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Warren Takunda

Cryptocurrency

Key points:

Bitcoin stays near its old all-time highs from late 2024 as US stocks digest increased tensions in Europe.

Traders shrug off market nerves after BTC/USD drops 8% versus its latest record of $112,000.

June may end up flat without another market catalyst.sought a retest of 2024 highs at the June 2 Wall Street open as Russia-Ukraine tensions returned to the market. Bitcoin Price Dips Under $104K as Russia-Ukraine Woes Rile US Stocks_1

Bitcoin Price Dips Under $104K as Russia-Ukraine Woes Rile US Stocks_1

BTC/USD 1-hour chart. Source: Cointelegraph/TradingView

Bitcoin wobbles as bulls fight for 2024 peak

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD falling below $104,000.

US stocks opened cautiously amid expectations of geopolitical volatility to come. Commenting, trading resource The Kobeissi Letter underscored the uncertainty of the current situation.

“This is effectively the market pricing-out the Russia-Ukraine peace deal that President Trump has been working on for 3+ months,” it wrote in part of ongoing X coverage, referring to US President Donald Trump’s aims to halt the conflict.

“However, we have yet to receive a single comment from the US or President Trump. Clearly, something is going on behind the scenes. How will the US respond?”

S&P 500 1-hour chart. Source: Cointelegraph/TradingView

Crypto voices had similar concerns, with independent analyst Filbfilb predicting an undesirable outcome for risk assets.

“Markets look like they are struggling to me, with gold looking strong & tensions with Russia escalating lead me to suspect selling today on the cards & for the start of June,” he told X followers on the day.

Filbfilb predicted that should stocks find fresh bullish momentum, Bitcoin would “probably outperform” as a result, adding that BTC “still looks bullish” long term.

Some traders shared that view, among them popular trader Jelle, who implied that reactions to the current retest of local lows were overly bearish. Bitcoin Price Dips Under $104K as Russia-Ukraine Woes Rile US Stocks_3

Bitcoin Price Dips Under $104K as Russia-Ukraine Woes Rile US Stocks_3

Others complimented the May monthly candle close, which ended up as Bitcoin’s highest ever — albeit to little fanfare.

“This is one of the most beautiful monthly closes you could wish for $BTC,” fellow trader Moustache responded. Bitcoin Price Dips Under $104K as Russia-Ukraine Woes Rile US Stocks_4

Bitcoin Price Dips Under $104K as Russia-Ukraine Woes Rile US Stocks_4

BTC/USD 1-week chart. Source: Moustache/X

“Muted” BTC price action expected

Looking ahead, market participants were undecided — after recent volatility, they agreed, BTC/USD might need a sideways trading period.

“Despite the volatility, BTC continues to hover above $102k, a testament to underlying support. Volatility on the frontend has steadily compressed, and risk reversals have begun to normalise across tenors,” trading firm QCP Capital wrote in its latest bulletin to Telegram channel subscribers.

“This signals expectations for muted price action in the near term.”

QCP gave a $100,000-$110,000 price corridor going forward in the absence of further volatility catalysts.

Popular trader Daan Crypto Trades meanwhile looked to previous monthly opening behavior for clues.

“I think there's a good chance that the first week or so is likely a move that can be faded upon seeing the first signs of a local reversal. If this is the case, I will stick with that trend for the remainder of the month,” part of an X post on the topic read.

Daan Crypto Trades expressed “strong bias towards either direction” for June as a whole. Bitcoin Price Dips Under $104K as Russia-Ukraine Woes Rile US Stocks_5

Bitcoin Price Dips Under $104K as Russia-Ukraine Woes Rile US Stocks_5

BTC/USDT perpetual swaps 1-day chart. Source: Daan Crypto Trades/X

Source: Cointelegraph

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James Whitman

Central Bank

Economic

Federal Reserve Bank of Dallas President Lorie Logan said the US central bank can remain patient as it assesses risks to both inflation and unemployment.

“We’re seeing risks on both sides of our dual mandate that appear fairly balanced,” Logan said Monday during a banking conference hosted by the Dallas Fed. “That leaves us well positioned to wait for the data, to be patient and, if we get significant information that really changes the outlook on the balance of risks, we’ll be prepared to respond.”

Fed officials have said it could take months to gain clarity on the economic impacts of sweeping policy changes, particularly around trade. Investors widely expect policymakers to keep borrowing costs unchanged when they meet June 17-18 in Washington. Many economists have pushed their calls for rate cuts further into the second half of the year.

Logan repeated her view, shared by many of her colleagues, that it’s crucial to make sure tariff-driven price increases don’t feed a more persistent rise in inflation. Some survey-based measures of long-run inflation expectations have risen but most officials still view expectations as well anchored.

The Dallas Fed chief added that policymakers ought to closely monitors both survey and market-based gauges. Market-based measures have been stable but can, she said, be distorted by liquidity issues.

Source: Bloomberg Europe

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Damon

Economic

Some bearish bond investors in Japan and the US appear to believe that a paradigm shift is underway in the sovereign bond markets.

To wit, consider the following statement from Jim Bianco on Thoughtful Money:

“If these deficits are really going to kick in and cause problems, these rates are going to go much higher than this.”

The bond market paradigm shift we observe is that some people believe the governments and central banks of the largest nations are no longer managing interest rates.

For those who believe in this paradigm shift, we ask a simple question: Why Would They Stop Now?

The governments and central banks of developed countries have long-standing policies that keep high levels of public and private debt serviceable.

Moreover, these same policies aim to incentivize further debt accumulation.

The bearish voices in the bond market, claiming a paradigm shift is underway, show a disregard for history.

Bond bulls and bears can all agree that global fiscal debt trends are not sustainable.

However, do you think the governments are now willing to pay the price for such malfeasance?

Two years ago, the Japanese government uncapped its interest rates, and not surprisingly, they have surged higher.

However, with their 30-year bond approaching 3%, they announced that they are considering adjusting their debt issuance patterns. As shown below, its 30-year bond fell 35 basis points after the announcement.

Bond yields in the US and around the world fell in sympathy.

Governments around the world will preserve their debt-driven financial systems and economies by keeping a lid on interest rates.

Again, ponder the one simple question if you believe in the paradigm shift: why would the governments and central banks stop manipulating the bond market now?

Source: Zero Hedge

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Warren Takunda

Economic

The European Union is preparing for another round of trade talks with the US and warned that it may speed up retaliatory measures if President Donald Trump follows through on his tariff threats, the latest of which includes a 50% levy on steel and aluminum imports.

The European Commission, which handles trade matters for the EU, said Monday it “strongly” regrets the tariff hike — up from an originally planned 25% — and said the move is undermining efforts to reach a solution to the trade conflict.

The EU’s trade chief, Maros Sefcovic, will meet with US Trade Representative Jamieson Greer on Wednesday in Paris and a team from the commission is on its way to Washington to continue technical talks, Commission Spokesman Olof Gill told reporters in Brussels Monday.

“If no mutually acceptable solution is reached, both the existing and possible additional EU counter-measures will automatically take effect on July 14 or earlier if circumstances require,” Gill said. “The commission has been clear at all times about its readiness to act in defense of EU interests protecting our workers, consumers and industry.”

The EU is trying to fast-track negotiations with the US before a July 9 deadline, when Trump said he’ll hit nearly all of the bloc’s imports with a 50% tariff. He’s lashed out at the bloc for being unfair on trade, and has called on the EU to reduce its trade surplus in goods and to lower tariff and non-tariff barriers, such as its value-added tax.

Trump agreed earlier to delay the implementation of tariffs on metals as well as on cars and car parts in a bid to allow negotiations to find a broader trade agreement. The EU also agreed to withhold its own counter-measures.

The EU has approved tariffs on €21 billion ($24 billion) of US goods in response to Trump’s metals levies that can be quickly implemented. They target politically sensitive American states and include products such as soybeans from Louisiana, home to House Speaker Mike Johnson, as well as agricultural products, poultry and motorcycles.

The bloc is also preparing an additional list of tariffs on €95 billion of American products. Those measures, which are in response to Trump’s “reciprocal” levies and automotive duties would target industrial goods including Boeing Co. aircraft, US-made cars and bourbon.

“In the event that our negotiations do not lead to a balanced outcome, the EU is prepared to impose counter-measures including in response to this latest tariff increase,” Gill said.

While warning of further tariffs, the bloc said its priority is to allow space for negotiations and that reducing levies remains the long-term goal.

The commission’s negotiating strategy focuses on critical sectors — such as semiconductors and pharmaceuticals — as well as tariff and non-tariff barriers, Bloomberg reported earlier. The commission will also link its approach to addressing regulatory barriers with its plans to simplify rules.

The industries that Sefcovic will focus on either have already been hit with US tariffs, or have been earmarked for future levies. The EU has proposed deepening cooperation with the US in those sectors as part of a previous proposal shared with the US last week, Bloomberg reported.