Markets in Limbo: The Trump-Putin Summit Effect

Emerging market stocks and currencies were static on Friday as investors held their breath ahead of the summit between U.S. President Donald Trump and Russia's Vladimir Putin. The crucial meeting, centered around the ongoing conflict in Ukraine, has generated significant anticipation in global markets.

While a gauge tracking emerging market equities steadied at 1,271.2 points, expectations for a second consecutive weekly gain prevail. This optimism largely stems from potential breakthroughs in Trump-Putin talks, coupled with speculation over a Federal Reserve rate cut next month. The two leaders are set to meet in Alaska, with discussions on a ceasefire and nuclear propositions on the agenda, raising anxiety in European markets, particularly due to the exclusion of Ukrainian President Volodymyr Zelenskiy from the summit.

Despite Trump's indication of a potential follow-up meeting including Zelenskiy, analysts like Nicolaie Alexandru-Chidesciuc from J.P. Morgan remain skeptical about a comprehensive peace settlement within the year. Meanwhile, Russia's rouble fell while Ukraine's bonds gained, reflecting investor sentiment. In a regional context, market closures impacted Poland and Romania due to local holidays, with attention turning to Romania's impending Fitch credit rating review.

(With inputs from agencies.)