Ukraine At 'critical Moment' In War As European Allies Ramp Up Pressure On Russia

Russia-Ukraine Conflict

Summary:

Ukraine's European allies on Monday said that the war is at a "critical moment" as President Volodymyr Zelenskyy said his country is preparing to share a revised peace plan with the U.S.

Zelenskyy met with U.K. Prime Minister Keir Starmer, German Chancellor Friedrich Merz and French President Emmanuel Macron in London as the European leaders scrambled to ensure that Ukraine's territorial integrity and future security are not compromised in the face of growing U.S. pressure.

In a statement following the meeting, Starmer's office said the leaders had discussed "the importance of the U.S.-led peace talks for European security" and supported the progress made so far.

"The leaders underscored the need for a just and lasting peace in Ukraine, which includes robust security guarantees," Starmer's representatives added. "The leaders agreed that, while diplomatic efforts continue, Europe must stand with Ukraine, strengthening its ability to defend against relentless attacks."

Starmer, Merz, Macron and Zelenskyy also discussed "positive progress" that had been made on using frozen Russian assets to support Ukraine's reconstruction.

The European Commission, the executive arm of the EU, last week proposed using cash from the balances of European financial institutions holding frozen Russian Central Bank assets to support Ukraine with a "Reparations Loan." It also tabled borrowing the funds from international markets, offering member states an alternative to using Russian capital.

The U.K. prime minister's office noted that those present in Monday's meeting had also joined a call with other European leaders following the initial talks.

"The leaders all agreed that now is a critical moment and that we must continue to ramp up support to Ukraine and economic pressure on Putin to bring an end to this barbaric war," the spokesperson said.

U.S. support remains crucial

As the European leaders reiterated their support for Kyiv, Zelenskyy stressed that Ukraine also remained reliant on input from Washington.

"There are some things which we can't manage without the Americans, some things we can't manage without Europe, that's why we need to make some important decisions," he said, during a press briefing.

However, Merz struck a somewhat cautious tone on U.S. negotiators achieving an imminent breakthrough that would be acceptable to both Ukraine and wider European continent.

"This could be a decisive time for all of us," he told reporters. "We are trying to continue our support for Ukraine, on the other hand we are seeing these talks and decisions between Moscow and the U.S., I'm looking forward to hearing from [Zelenskyy] what the outcome of these talks might be."

The U.K. and France have been leading proponents of a "Coalition of the Willing," a group of countries that could be part of a "reassurance force" in a post-war Ukraine that helps to guarantee its security.

Ukraine is expected to share a revised peace plan with the U.S. after the London talks, according to media reports.

The updated plan consists of 20 points after some "obvious anti-Ukrainian points were removed," Zelenskyy said in comments reported by Sky News. He added that he will share the revised plan with the U.S. today.

On Sunday, Trump claimed Zelenskyy had not yet read the latest U.S.-backed peace plan yet, though it's unclear which version Trump was referring to.

"We all know that the destiny of this country is the destiny of Europe," Merz added on Monday. "Nobody should doubt our support for Ukraine. I'm skeptical about some of the details which we are seeing in the documents coming from the U.S. side, but we have to talk about that, that's why we are here."

Anna Rosenberg, head of geopolitics at Amundi Investment Institute, told CNBC's "Europe Early Edition" on Tuesday that negotiations to bring the war to an end seemed to be "going in circles."

"It's a lot of talking back and forth," she said. "Frankly, sometimes I wonder what they keep on talking about, because the sticking points are always the same. It's about territory and it's about the security guarantees, and the security guarantees are arguably more difficult than the territory, but the territory is also difficult for Ukraine."

Last week, Russian President Vladimir Putin threatened that Moscow would take Ukraine's critical Donbas region "by force" if Ukraine does not concede the territory willingly.

Rosenberg told CNBC on Tuesday that Kyiv is unlikely to give in to that pressure.

"The territory we're talking about is a critical zone of defense for Ukraine, which, if Ukraine gives it up, would make it much easier for Russia to go deeper into Ukraine, because it's a so-called fortress belt of heavy fortification," she explained.

"Behind that fortress belt, there's a plane you can easily enter with military. So, Ukraine is going to hold on to that for as long as they can. They will only give up on the territory once they feel confident. They have security guarantees that will give them confidence that there's not going to be an attack in a couple of months or years down the line."

Source: CNBC

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Add to Favorites

Gerik

Economic

Bond Markets Pause Ahead of Key Jobs and Policy Signals

U.S. Treasury yields remained largely unchanged in early Tuesday trading, with the 10-year yield hovering around 4.178%, the 2-year near 4.781%, and the 30-year slightly lower at 4.81%. The yield curve remains closely watched as traders digest mixed signals from recent economic indicators and prepare for the release of the JOLTS job openings report, expected to show 7.15 million vacancies for October.

Shorter-term yields, such as the 1-month Treasury at 3.734% and the 1-year at 3.626%, also reflected limited movement, suggesting that markets are in a holding pattern ahead of the Federal Reserve’s announcement on December 10.

Fed Cut Widely Anticipated, but Forward Guidance Matters More

Market participants currently see an 87% chance that the Federal Reserve will lower interest rates by 25 basis points at its upcoming meeting, according to CME FedWatch data. This would mark a key shift from the aggressive tightening phase of the past two years and potentially signal the start of a broader easing cycle in 2026.

However, analysts caution that the tone of Fed Chair Jerome Powell’s remarks will be just as important as the decision itself. If Powell signals that the central bank will pause for several meetings to assess data, that would support the current trading range for both Treasury yields and the U.S. dollar.

Conversely, if Powell takes a more dovish stance suggesting that further cuts may come as early as January analysts from Eastspring Investments predict a bearish steepening of the Treasury curve and a weaker dollar, as markets price in greater monetary accommodation.

Macro Focus: Jobs Data as an Inflation Proxy

Investors are especially focused on labor market data as a barometer for inflationary pressures. A weaker-than-expected JOLTS report would likely reinforce the case for sustained rate cuts, while strong job openings could delay the Fed’s easing cycle.

With markets finely balanced, Treasury yields have remained range-bound, reflecting both cautious optimism about disinflation and lingering concerns about economic resilience. These cross-currents suggest that any surprise in the jobs report or Powell’s guidance could lead to swift repricing across fixed-income markets.

Treasury yields remain in a tight range ahead of pivotal U.S. economic and policy events. While a rate cut is widely expected, the Fed’s forward guidance will determine whether yields stabilize or shift decisively lower. For now, bond investors appear to be adopting a wait-and-see stance until clearer signals emerge on the direction of monetary policy and labor market strength.

Source: Reuters

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Winkelmann

Political

Economic

· Balloons from Belarus repeatedly disrupt Lithuania's airspace

· Seeks greater power for military

· Belarus denies responsibility, accuses Lithuania of provocations

Lithuania's government on Tuesday declared a state of emergency over smuggler balloons originating in Belarus that have disrupted aviation, and asked parliament to allow the military to operate alongside police and border guards.

Vilnius airport has been closed repeatedly due to the weather balloons, which Lithuania says are sent by smugglers transporting cigarettes and constitute a "hybrid attack" by Belarus, a close ally of Russia.

"The state of emergency is announced not only due to civil aviation disruptions but also due to interests of national security," Interior Minister Vladislav Kondratovic told a government meeting that was streamed live on Tuesday.

Belarus has denied responsibility for the balloons and accused Lithuania of provocations including sending a drone to drop "extremist material", which Lithuania denies.

SEEKING EXTENDED POWERS FOR THE ARMY

The Lithuanian government asked parliament to grant the military powers to act in concert with police, border guards and security forces during the state of emergency, as well as on its own, Kondratovic said.

If parliament agrees, the army will be given permission to limit access to a territory, to stop and search vehicles, to perform checks on people, their documents and their belongings, and to detain those resisting or suspected of crimes.

The military would be permitted to use force for these functions, Defence Minister Robertas Kaunas said. The emergency measures will last until the government calls them off.

European Commission President Ursula von der Leyen said on December 1 that the situation at the border was worsening, and called the balloon incursions a "hybrid attack" by Belarus that was "completely unacceptable".

Lithuania also imposed a state of emergency in 2021 in the Belarus border region over what it said was a campaign by Belarus to send migrants across the border illegally.

The following year, opens new tab Vilnius announced a state of emergency following Russia's invasion of Ukraine, over fears that Lithuania could also become a target.

Source: Reuters

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Michelle

Forex

Economic

Governor Kazuo Ueda recently discussed Japan's economic resilience amid global trade challenges, specifically referencing the Bank of Japan's monetary policy shifts since March 2024.

This cautious commentary highlights ongoing trade uncertainties and currency market effects, lacking any direct indication of Japan having withstood tariffs without economic fallout.

BoJ Notes Moderate Recovery Amidst U.S. Tariffs

Governor Kazuo Ueda of the Bank of Japan has addressed Japan's economic state amidst U.S. tariffs. While not claiming the economy has "weathered" the tariffs, he emphasizes moderate recovery despite ongoing uncertainties.

"Japan's economy has recovered moderately, although some weakness has been seen in part... Overseas economies have grown moderately on the whole, although some weakness has been seen in part, reflecting trade and other policies in each jurisdiction." — Bank of Japan Statement

BoJ has initiated a policy normalization path since 2024. While no official declaration on "weathered" tariffs exists, economic policies are rigorously supporting Japan's GDP growth amidst international trade pressures.

Japan's Q3 2025 GDP Contracts by 0.6%

Japan's Q3 2025 GDP shows a 0.6% contraction, mainly due to tariff impacts. The U.S. tariff environment remains a significant headwind.

Potential financial outcomes include ongoing BoJ rate adjustments and yen volatility. While immediate crypto impacts are limited, broader economic changes could indirectly affect the sector.

BoJ's Historical Dovish Response to Tariffs

During 2018–2019, U.S. tariffs previously exerted pressure on Japan's export sector. Historical BoJ responses were dovish, providing monetary relief.

Experts at Kanalcoin suggest the BoJ's cautious approach will continue, potentially leading to a scientific monetary response. Citing past trends, experts forecast minimal direct crypto market disruptions.

Source: CryptoSlate

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Gerik

Economic

Stocks

European Indices Open Flat as Fed Decision Looms

European stock markets are expected to open on a subdued note Tuesday, with futures tied to the Stoxx 50, FTSE 100, DAX, and CAC 40 all trading flat in early hours. Investors across global markets remain cautious ahead of the U.S. Federal Reserve’s final interest rate decision of 2025, scheduled for December 10.

According to the CME FedWatch Tool, money markets are currently pricing in an 87% probability of a 25-basis-point cut, which would bring the Federal Funds Rate to a range of 3.5%–3.75%. This anticipated move has held investor attention globally, as it would signal the Fed's first rate cut since it began its tightening cycle in 2022.

Implications for European Monetary Policy

The Fed’s decision is likely to shape expectations for upcoming monetary policy decisions across Europe. The Swiss National Bank is scheduled to announce its own decision on Thursday, followed by the European Central Bank, Bank of England, Norges Bank (Norway), and Riksbank (Sweden) on December 18.

Central banks across Europe face the dual challenge of managing inflation expectations while supporting slowing economic activity. The ECB, in particular, has faced criticism for its slow exit from ultra-accommodative policy, and December’s meeting could be a pivotal moment for signaling 2026 strategy.

Corporate Developments: Sustainability Rules Eased and Downgrades Hit Auto Sector

In corporate news, the European Union announced an agreement to simplify corporate sustainability reporting laws, exempting most companies from complex compliance measures. The move was celebrated by Danish European Affairs Minister Marie Bjerre as a step toward enhancing the bloc’s competitiveness and easing regulatory burdens on businesses.

Meanwhile, Deutsche Bank downgraded Volvo from Buy to Hold, and also slashed its target price on Daimler Truck by 4.7%. The bank cited significant contraction in the U.S. truck market in 2025 as a test of resilience for commercial vehicle manufacturers. Strategists warned that the U.S. remains a key competitive pressure point going into 2026.

Elsewhere, Magnum Ice Cream made its public debut on the Amsterdam stock exchange, following its spin-off from Unilever. The stock saw a modest uptick in its first session.

U.S. Policy Shift on Nvidia Adds Global Tech Twist

Market sentiment was also shaped by a fresh development out of Washington, where President Trump announced that Nvidia will be permitted to export its H200 AI chips to “approved customers” in China—on the condition that 25% of proceeds go to the U.S. government. While the announcement supported U.S. tech stocks in after-hours trading, analysts warned that such deals could deepen geopolitical imbalances in the AI sector, potentially giving China a short-term advantage in access to advanced chips.

Key Data Ahead and Global Market Snapshot

Investors will be watching closely for several macroeconomic releases on Tuesday, including German export figures, Dutch inflation, and UK retail sales. These indicators may help clarify whether European economies are stabilizing into year-end or remain in stagnation.

Overnight, Asian stocks traded broadly lower, continuing the cautious global tone. Meanwhile, U.S. stock futures remained flat as traders await clarity from the Fed and further signs on the economic outlook.

With key interest rate decisions and economic data on the horizon, European markets are likely to remain rangebound until the Fed provides greater clarity on the future path of monetary policy. Whether the expected cut will mark a pivot or a pause will be instrumental in determining investor confidence as 2025 draws to a close.

Source: CNBC

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Gerik

Economic

Pakistan Secures Key IMF Support Amid Ongoing Recovery

On Tuesday, the International Monetary Fund (IMF) approved the disbursement of $1.2 billion to Pakistan, marking a significant milestone in the country’s path toward macroeconomic stability. The approval follows two completed program reviews one under Pakistan’s main loan arrangement and another under a climate-focused facility. In total, Islamabad has now received $3.3 billion from the IMF since last year as part of a broader $3 billion bailout aimed at preventing default and encouraging structural reform.

The new tranche includes $1 billion from the IMF’s standard lending framework and an additional $200 million dedicated to climate-related programs. The funds are part of a 37-month arrangement that requires Pakistan to meet strict fiscal, monetary, and structural benchmarks to continue receiving installment-based disbursements.

Reform Milestones and Economic Stabilization

The IMF credited Pakistan with making “significant progress” on several fronts despite a challenging global environment and domestic setbacks, such as widespread flooding earlier this year. Key accomplishments include a stronger fiscal position, improved foreign exchange reserves which have reached $14.5 billion and signs of economic recovery.

Prime Minister Shehbaz Sharif welcomed the announcement as a validation of his administration’s reform agenda. He praised the efforts of Finance Minister Muhammad Aurangzeb and credited Field Marshal Gen. Asim Munir, Pakistan’s army chief, for bolstering the government's implementation capacity. Sharif emphasized that reforms, particularly in taxation, digitalization, and state-owned enterprise restructuring, have positioned Pakistan as a potential “case study” for economic stabilization, though he warned that maintaining growth momentum will require further structural efforts.

Inflation and Climate-Driven Economic Pressures

Despite encouraging macroeconomic trends, Pakistan continues to face inflationary pressures exacerbated by abnormal monsoon flooding that damaged food supply chains. The IMF acknowledged the short-term spike in food prices but anticipates relief as supply chains normalize and fiscal discipline is maintained.

The climate-linked portion of the IMF support package reflects Pakistan’s growing vulnerability to climate shocks and its need for improved disaster response systems. The $200 million facility is directed at enhancing flood resilience, modernizing water usage frameworks, and advancing financial reporting standards related to climate risk.

Policy Recommendations and Reform Conditions

IMF Deputy Managing Director Nigel Clarke stressed the importance of sustained discipline, urging Pakistan to continue tightening monetary policy, maintain a flexible exchange rate, and advance long-delayed reforms in the energy sector particularly around state-owned enterprises. Clarke acknowledged the government’s dual challenge of meeting fiscal targets while addressing the humanitarian and economic fallout from floods.

The IMF’s conditionality framework remains firm, with future disbursements contingent on progress in tax mobilization, energy subsidy reform, and adherence to budgetary discipline. The message from the IMF is clear: while progress has been made, the credibility of Pakistan’s reform program will be tested by its ability to navigate both domestic political constraints and global uncertainties.

The $1.2 billion disbursement offers immediate fiscal relief to Pakistan and validates its recent economic management. However, the longer-term success of the IMF program depends on Islamabad’s ability to transition from stabilization to sustainable growth. With political leadership aligning across civilian and military lines, and external financing secured, Pakistan now faces the more complex challenge of turning reform commitments into lasting structural transformation amid persistent economic and climate vulnerabilities.

Source: Reuters

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Pepperstone

Forex

Economic

Summary

Rates On Hold: The ECB should maintain all policy settings at the December meeting, holding the deposit rate steady at 2.00%
Forecasts In Focus: December's staff macroeconomic projections will be they key area of focus, particularly whether an inflation undershoot is foreseen for 2028
Easing Cycle Over: The upcoming meet should do nothing to dispel the idea that the easing cycle is done & dusted, though policy tightening remains some considerable way off

After what most market participants would describe as an incredibly dull October confab, the ECB's Governing Council aren't especially likely to deliver much more by way of excitement this time around, with policymakers still in a 'good place', and being set to round out the year by standing pat on all policy instruments.

Done & Dusted On Rates

As alluded to above, the ECB's Governing Council are set to stand pat at the conclusion of the December policy meeting, maintaining the deposit rate at 2.00%. Such a decision to stand pat comes not only as the EUR OIS curve discounts next-to-no chance of any further easing, but also amid little indication from any GC members that they presently see a desire to reduce rates further. All signs point to the easing cycle having now come to an end, and 2.00% being this cycle's terminal rate.

That said, the swaps curve has got rather excitable of late, now discounting around a 1-in-5 chance that the ECB will deliver a 25bp hike by the end of next year, spurred on by hawkish comments from Exec. Board member Schnabel in recent days. That pricing does appear rather over-ambitious at this juncture, given the likelihood of a relatively sustained inflation undershoot, hence participants will be watching for any explicit pushback on the idea that policy will be tightened within the next 12 months.

Guidance To Remain Unchanged

With the GC set to hold all policy settings steady, focus will naturally fall on whether policymakers decide to make any guidance tweaks.

The chances of said tweaks, however, range between 'incredibly slim' and 'none at all', with the accompanying policy statement set to simply reiterate the commentary that has been used for many months, and is now incredibly familiar to all participants. Consequently, the statement will repeat that policymakers will continue to adopt a 'data-dependent' and 'meeting-by-meeting' approach to upcoming decisions, while also making no 'pre-commitment' to a particular policy path.

Updated Projections To Drive Policy Path

Perhaps the most interesting area of the December confab will be the updated round of staff macroeconomic projections, particularly the first read on how the projections see the eurozone economy evolving into 2028.

On inflation, the projections are again likely to point to headline CPI undershooting the 2% target both next year, and in 2027. While services inflation has started to bubble away once more in recent months, the beginning of 2026 will see a significant energy-induced base effect impact the data, dragging headline price metrics (much) lower in the first half of the year.

The two key areas of focus for the upcoming inflation projections will be, firstly, whether headline inflation is set to have risen back to 2% by the end of the horizon, in 2028. Secondly, if another undershoot is pencilled in for that year, the question becomes one of whether the Governing Council's doves view that as reason enough to begin pushing for further policy easing, in the early months of next year.

Meanwhile, on growth, there are likely to be relatively little by way of significant changes to the forecast GDP growth path, not least considering that many of the headwinds which have buffeted the eurozone economy in 2025 will increasingly turn to tailwinds as we move into the new year. Said tailwinds are relatively numerous, including increased certainty in terms of global trading relationships (especially with the US), as well as the lagged effects of ECB policy easing, plus a broadly looser fiscal stance next year.

Of course, said fiscal stance will not be entirely equal across the bloc. The vast majority of any fiscal boost next year will come from Germany, where not only is a significant increase on defence and infrastructure spending on the cards, but also a considerable number of tax changes which should provide a boost to personal consumption. That, in turn, at an aggregate level, is likely to offset the impact of further fiscal consolidation in both France, and Italy, which should result in the overall GDP growth forecast remaining broadly unchanged, seeing the eurozone work its way back towards potential growth in 2027 and 2028.

Lagarde's Press Conference Shan't Rock The Boat

Turning to the post-meeting press conference, it seems highly unlikely that President Lagarde will seek to 'rock the boat' to any significant degree, thus raising the prospect of another turgid and dull affair, in keeping with the remarks delivered last time out, in October.

As a result, it is highly likely that Lagarde will simply reiterate the remarks that she made last time out, namely that policy is still in a 'good place', and that the ECB will ensure policy remains in such a place, while likely also confirming that the December decision to stand pat was a unanimous one.

As always, in addition to the presser, any post-meeting 'sources' stories will also be closely watched, particularly in determining how much weight, if any, policymakers are placing on the 2028 inflation forecasts.

Conclusion

On the whole, the December ECB confab is unlikely to be one that goes down as a game-changer in terms of the broader policy outlook.

While the GC's doves may seek to argue for another rate reduction early next-year, it remains likely that an overwhelming majority of policymakers see little-to-no need to shift to a more accommodative policy stance. Barring a material deterioration in economic growth, policymakers are likely to be relatively comfortable tolerating a modest inflation under-shoot, continuing to place more weight on 'hard' data, as opposed to staff projections.

As such, the base case remains that the ECB's easing cycle has now come to an end, and that the next rate move will indeed be a hike. Such a hike, however, is near-certain not to come next year, with the deposit rate set to remain at 2.00% through the end of 2026, and the matter of policy tightening one that will, eventually, be addressed in 2027.