Europe’s STOXX 600 index fell nearly 2 per cent to a seven-month low in early trade. But the mood turned more positive and the index was back around Monday’s closing level after reports that Russia would recognize the current boundaries of the breakaway regions.
“We are not in the clear, but that gives a path to de-escalation,” said Trium Capital fund manager Peter Kisler, referring to the news on Ukraine border recognition. Benchmark government debt was also in demand. German government bond yields hit their lowest level since Feb. 4 while U.S. Treasuries rallied.
German Chancellor Olaf Scholz put the certification of the Nord Stream 2 gas pipeline from Russia to Germany on ice, a measure widely considered the toughest Europe is likely to take against Moscow at this stage.