(Reuters) – Ukraine prepares to mark the third anniversary of Russia’s invasion while U.S. President Donald Trump, in between tariff threats, pushes for a ceasefire, voters in Germany pick a new government, and investor faith in AI poster-child Nvidia gets a reality check.
Here’s a look at the week in markets from Rae Wee in Singapore, Lewis Krauskopf in New York and Yoruk Bahceli, Libby George and Alun John in London.
1/ ON THE EDGE
Three years after Russia launched a full-scale invasion, Ukraine is at an inflection point.
Investor confidence that a Trump-led ceasefire would boost Ukraine’s economic prospects prompted a stunning rally in its bonds, with GDP-linked warrants briefly at their highest since early 2022.
But an equally stunning rhetorical shift has alarmed Europe: Trump now calls Ukrainian President Volodymyr Zelenskiy a “dictator” and has cut him out of U.S. talks with Russia aimed at reaching a peace deal, told Europe it must foot the bill for Ukraine going forward and demanded compensation for past U.S. support.
According to the Kiel Institute, donor countries have provided roughly 80 billion euros ($84 billion) annually since the war began, with European contributions topping those of the United States. Ukraine’s 2023 GDP stood at roughly $179 billion.
Moscow controls just under a fifth of Ukraine’s territory. Any wavering in U.S. support would hamper Ukraine’s ability to continue fighting.
2/ HIT THE BRAKE
Germany votes on Sunday. Markets are focused on what a new government will do to boost an economy that has flat-lined after years of underinvestment.
The question is whether Germany reforms its “debt brake” that limits its structural budget deficit to just 0.35% of output, with U.S. tariffs looming and defence spending gaining urgency.
For now, investors reckon any change will be limited. Conservative leader Friedrich Merz, who is widely expected to head the next government, has only shown limited openness to reform.
The risk to watch is whether parties that oppose such a reform gain enough parliamentary seats to block constitutional change.
The election is also critical to how Europe finds the hundreds of billions of euros needed to ramp up its defences as a Ukraine ceasefire hangs in the balance.
3/ NVIDIA ON DECK
Chipmaker Nvidia reports quarterly results for the first time since the emergence of DeepSeek’s AI model sent shockwaves through markets. Nvidia suffered a record one-day loss in market value last month over how low-cost DeepSeek might shake up the AI ecosystem, although shares have since mostly bounced back. The company’s February 26 report will test that rebound, as well as the market leadership of the “Magnificent 7” megacaps, which have seen mixed performances so far in 2025, as other U.S. stock sectors have picked up the slack. On February 28, the release of the personal consumption expenditures price index will give the latest read on U.S. inflation after a separate read on consumer prices came in hotter than expected.
4/ TARIFF MAN
Trump will almost definitely make headlines next week with more threats of tariffs, the question is whether traders will be listening.
The answer is “not really”. State Street found that in November 40% of all equity market volatility could be explained by the trade war narrative. Now, it is near 2%.
The shift, investors say, is due to perceptions of a growing gap between what Trump threatens and what he actually does. And right now, markets have much to process, from Ukraine to semiconductor chips.
Deals might get done. The EU’s trade chief has met top U.S. trade officials, and Trump says a new deal is possible with China.
Alternatively, maybe something in the coming week will make markets really believe the U.S. will follow through on the tariffs they have threatened on cars, semiconductors and chips, pharmaceuticals, lumber, and – Trump says – “some other things”.
5/ PRICE PRESSURES
Investors will have their eyes on inflation readings for Japan and Australia to gauge the outlook for rates in their economies, with that of Japan being particularly important. The yen has been on a tear over the past few days on growing bets for imminent Bank of Japan (BOJ) rate hikes – a view that is only set to spread should Friday’s data show that price pressures continued to quicken in Japan this month. While the market currently expects the next BOJ rate rise to come in July or September, some are betting that a move could come even sooner should conditions be favourable. BOJ officials have in recent times also turned more decisively hawkish.
As for Australia, Wednesday’s figures could provide the Reserve Bank of Australia (RBA) with more clarity on its fight against inflation, after policymakers struck a cautious tone on the prospect of further easing at their latest policy meeting.
(Compiled by Amanda Cooper; Graphics by Prinz Magtulis, Vineet Sachdev, Kripa Jayaram and Pasit Kongkunakornkul; Editing by Hugh Lawson)
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