US Resumes Assistance to Ukraine as Push for Ceasefire Grows

US Resumes Assistance to Ukraine as Push for Ceasefire Grows

Following nine hour talks between senior US and Ukrainian officials in Saudi Arabia, Washinton has agreed to resume aid to Kyiv alongside the resumption of sharing intelligence in the hope that a ceasefire can be achieved.

It’s understood that Kyiv may be willing to accept the Trump Administration’s proposal for a 30-day ceasefire, though talks with Russia are yet to deliver a firm agreement from Moscow.

The talks yesterday represented the first official meeting since the clash in the oval office between Trump and Zelensky earlier this month. Given the extent to which Trump changed US foreign policy towards Ukraine after the row, as the BBC’s Anthony Zurcher notes yesterday’s agreement “represents a remarkable change of course”.

According to a joint statement from Kyiv and Washington, “the United States will communicate to Russia that Russian reciprocity is the key to achieving peace.? The United States will immediately lift the pause on intelligence sharing and resume security assistance to Ukraine.”

The resumption of military and intelligence assistance from Washington will be a much-welcomed development for Kyiv, not least given how fears were growing over the gap that would be left by the US halting such assistance.

As we looked at last week, the US represents the largest provider of military aid to Ukraine by some margin, with the Kiel Institute for the World Economy tracking €64.13 bn in military support from Washington between January 24, 2022 to December 31, 2024. This comes against Germany allocating €12.61 bn in military aid, the UK €10.07 and Denmark €7.54bn.

Trump now hopes to speak with Putin, as Washington looks for ways for a possible ceasefire to be advanced into a possible cessation.

Following yesterday’s talks, Marco Rubio, the US Secretary of State said of Russia that "the ball is in their court".

Such sentiments follow the joint statement saying that “both delegations agreed to name their negotiating teams and immediately begin negotiations toward an enduring peace that provides for Ukraine’s long-term security.? The United States committed to discussing these specific proposals with representatives from Russia.? The Ukrainian delegation reiterated that European partners shall be involved in the peace process”.

Looking Ahead

Following the European Central Bank’s decision to cut rates by a further 25bps last Thursday, President of the ECB, Madam Lagarde, speaks at the 25th ECB and its Watchers conference at Campus Westend in Frankfurt.

It will also be the first time we hear from her since the EU's tariff retaliation announcement early this morning. Any comment on such matter may help settle or escalate any global trade war jitters and as such will be eagerly awaited by market participants around the world.

At 12:30 US inflation figures for the month of February are set to be released. CPI MoM and YoY are expected at 0.3% and 2.9% respectively. Consensus data suggests CPI ex Food and Energy MoM and YoY will come in at 0.3% and 3.2% respectively.

It is important to note that each of the 4 prints are expected to decrease from the previous month. It follows such that any beat may cause the market to demonstrate a greater concern that inflation is not is not returning to its desired 2% target.

As if that wasn’t enough, in the wake of heightened geopolitical tensions with the US, the importance of the Bank of Canada’s Interest Rate Decision at 13:30 can not be understated.

According to Bloomberg, the market is pricing in a 99.8% chance of a 25bps cut later today, bringing the bank rate down to 2.75%.

This is also the first monetary policy decision since Mark Carney, of whom showcases a plethora of high-ranking stints in major financial institutions around the world, was voted into office as Canada’s new prime minister.?