Insights 
VT 
Trump is planning to meet with Putin next week to address the ongoing conflict involving Russia and Ukraine. Following this, there will be a three-way meeting involving Zelensky, aimed at bringing the conflict to an end.
The White House announced these intentions, though Trump did not share the details personally on social media. The potential resolution to the conflict may have various economic impacts if it occurs.
Possible Economic Impacts
A peaceful outcome could boost risk assets and exert downward pressure on energy prices, particularly oil and natural gas. This scenario would be based on the expectation of restored Russian supply to Europe and improved geopolitical stability.
European equities, the euro, and other European currencies might benefit from enhanced economic sentiment and reduced energy costs. However, the overall economic impact will depend on the peace deal’s terms, potential sanctions relief, and the credibility of achieving lasting stability.
Given the news of a potential summit next week, we are positioning for a significant shift in market sentiment. The primary narrative is one of risk-on, driven by the prospect of ending the long-running conflict in Ukraine. This development introduces major volatility, creating opportunities for those prepared to act in the coming days.
We see the most direct impact on energy markets. A credible peace deal would likely see Russian supply gradually return to global markets, pressuring prices downward. We are considering buying put options on October WTI crude futures, which have been holding above $85 per barrel, and shorting European natural gas contracts, as prices that were hovering near €45 per megawatt-hour could fall sharply.
Global Market Reactions
European assets stand to gain the most from reduced geopolitical risk and lower energy costs. We are looking at going long on Euro STOXX 50 futures, which have been stagnant for much of this summer. Similarly, call options on the EUR/USD pair are attractive, especially after the currency has struggled to maintain levels above 1.10 for most of 2025.
This positive sentiment should extend to broader risk assets. We anticipate a rally in U.S. indices, similar to the brief but sharp market upticks we saw on ceasefire rumors back in 2022 and 2023. Long-dated call options on the S&P 500 or Nasdaq 100 could provide leveraged exposure to this potential upside.
However, the outcome is far from certain, and a failed summit could trigger a sharp market sell-off. The VIX, which measures volatility, has already climbed to over 17 from its recent lows, indicating rising market anxiety. We believe it is prudent to hedge any bullish positions by purchasing some out-of-the-money puts on major indices.
The key in the next two weeks will be to trade the initial wave of optimism while remaining nimble. The initial headlines will likely drive markets higher, but the substance of any agreement will determine if the trend holds. We must be ready to reverse our positions if the terms appear unstable or sanctions relief is not substantial.
