• US 10-year Treasury yields fall from 32-month peak, while 5-year coupons fell from May 2019 levels.

• A Russian adviser suggests that Ukraine and Russia will reach a peace deal in May.

• China closes Langfang, near Beijing, due to covid epidemic.

Global traders are experiencing a deja vu feeling as market sentiment improves on Tuesday during the early Asian session, just like the previous day. However, key issues regarding risk appetite still remain unsolved.

The mood is reflected in the S&P 500 Futures rising 0.22% to snap the three-day downtrend, while the US 10-year Treasury yields fall from their highest levels since July 2019 by 1.1 basis points (bps), to 2.129% at press time.

It is worth noting that the 10-year Treasury yields rose 13.2 basis points to refresh 32-month highs, while the 5-year coupon surged to its highest level since May 2019, currently at 2.088%.

Market sentiment is being helped by the recent headlines from Ukraine. Sputnik quotes Oleksiy Arestovych (Adviser to Ukraine President Volodymyr Zilenskyy), to increase expectations for a Moscow-Kyiv peaceful transition in as little as two weeks, or even before May. The latest comments by President Zelenskyy of Ukraine, who stated that peace talks with Russia would continue on Tuesday after an abrupt pause Monday.

The market is not happy with the reports of a Russian drone flying over Poland, the sanctions on Moscow and the rejection by Russia-Belarus to purchase energy in the USD, however. China has announced activity restrictions in Langfang, China's capital, to combat the covid epidemic. There are concerns about another COVID-19 outbreak as the dragon nation is witness to heavy daily infected numbers. The most recent figures from China are the highest since May 2020.

Market sentiment sank Monday after a positive initial mood, as optimism around the Ukraine-Russian peace was waning, along with the news about the reemergence of coronavirus in China.

Market players will continue to pay attention to the Ukraine-Russia headlines in the future. Meanwhile, the February calendar will be decorated by the China's Retail sales and Industrial production, which are expected 3.0% YoY and 1.7% respectively.