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Europe should pick negotiator for possible Russian talks, says Zelenskyy – Europe live | Ukraine
Morning opening: Who’s going to speak for Europe?
Jakub Krupa
Ukraine’s president Volodymyr Zelenskyy suggested last night that the time has come for Europe to pick its preferred negotiator for eventual peace talks with Russia.
After talking with the European Council president, António Costa, Zelenskyy said they agreed that “Europe must be involved in the negotiations,” and to “have a strong voice and presence in this process.”
“It is worth determining who will represent Europe specifically,” he said.
Easier said than done.
While the EU has no shortage of presidents – of the European Commission, of the European Council, of the European Parliament, to name a few – it still lacks a single figurehead that would make an obvious candidate for any tricky talks with Moscow.
Vladimir Putin’s cheeky suggestion of pro-Russian former German chancellor Gerhard Schröder was quickly shot down for his links with Moscow, but Europeans will have to reflect on who could represent its interests if and when the talks actually progress to that stage.
Meanwhile, Ukraine launched retaliatory strikes against Russia over the weekend, killing at least four, as it hit a number of strategic locations, including in Moscow.
“Our responses to Russia’s prolongation of the war and attacks on our cities and communities are entirely justified,” Zelenskyy said, adding that the strikes on Moscow showed Kyiv was “clearly telling the Russians: their state must end its war.”
But overnight Russia attacked again with over 500 drones and 20 missiles, with Zelenskyy urging Europe to do “everything possible to ensure reliable protection against this.”
I will keep an eye on this today.
Elsewhere, I will look at the US envoy Jeff Landry’s controversial visit to Greenland, bring you an update on the government formation talks in Latvia, and monitor several high-profile meetings of leaders across Europe, including new Bulgaria’s PM Ruman Radev’s visit to Germany.
It’s Monday, 18 May 2026, it’s Jakub Krupa here, and this is Europe Live.
Good morning.
Key events
Europe should ‘push forward’ with sanctions as Putin has few good options on Ukraine, Estonia’s spy chief says
Meanwhile, Estonia’s spy chief Kaupo Rosin told Reuters that Russian president Vladimir Putin has few good options in Ukraine with his armed forces unable to advance significantly on the battlefield while western sanctions are chipping away at his resources.
He told the agency that Russia was losing more men than it was recruiting in the fifth year of its full-scale war, and that a general mobilisation would be deeply unpopular and potentially undermine stability.
“All these factors together are creating a situation where some people in Russia including in the higher levels understand that they have a big problem. Hard to say what Putin thinks about it, but I think all these factors are starting to float into his decision-making.”
He said the west should “push forward” with sanctions.
This is not the time to hesitate, just let’s keep going.
Russian drones strike critical infrastructure of Ukraine’s energy firm Naftogaz
Back to Ukraine, Russian drones struck critical infrastructure facilities of Ukraine’s energy firm Naftogaz in the Dnipropetrovsk region overnight, the company said.
Among the targets was a filling station, Naftogaz said, adding that the station’s premises and equipment had been completely destroyed and two employees had been injured, as reported by Reuters.
The cruise ship was carrying 25 crew members and two medical personnel as it reached Rotterdam, AP noted.
An AP journalist saw occupants wearing masks on the deck as the boat was escorted through the port by a tug boat and a Dutch police boat. Authorities say that the crew will enter immediate quarantine.
Hantavirus-hit cruise ship MV Hondius arrives in Rotterdam for disinfection, quarantine
In other news, the hantavirus-hit cruise ship MV Hondius has just arrived at the Port of Rotterdam, where it will be disinfected and its crew members will go into quarantine.
Morning opening: Who’s going to speak for Europe?
Jakub Krupa
Ukraine’s president Volodymyr Zelenskyy suggested last night that the time has come for Europe to pick its preferred negotiator for eventual peace talks with Russia.
After talking with the European Council president, António Costa, Zelenskyy said they agreed that “Europe must be involved in the negotiations,” and to “have a strong voice and presence in this process.”
“It is worth determining who will represent Europe specifically,” he said.
Easier said than done.
While the EU has no shortage of presidents – of the European Commission, of the European Council, of the European Parliament, to name a few – it still lacks a single figurehead that would make an obvious candidate for any tricky talks with Moscow.
Vladimir Putin’s cheeky suggestion of pro-Russian former German chancellor Gerhard Schröder was quickly shot down for his links with Moscow, but Europeans will have to reflect on who could represent its interests if and when the talks actually progress to that stage.
Meanwhile, Ukraine launched retaliatory strikes against Russia over the weekend, killing at least four, as it hit a number of strategic locations, including in Moscow.
“Our responses to Russia’s prolongation of the war and attacks on our cities and communities are entirely justified,” Zelenskyy said, adding that the strikes on Moscow showed Kyiv was “clearly telling the Russians: their state must end its war.”
But overnight Russia attacked again with over 500 drones and 20 missiles, with Zelenskyy urging Europe to do “everything possible to ensure reliable protection against this.”
I will keep an eye on this today.
Elsewhere, I will look at the US envoy Jeff Landry’s controversial visit to Greenland, bring you an update on the government formation talks in Latvia, and monitor several high-profile meetings of leaders across Europe, including new Bulgaria’s PM Ruman Radev’s visit to Germany.
It’s Monday, 18 May 2026, it’s Jakub Krupa here, and this is Europe Live.
Good morning.
In the most extreme cases, parents could face jail if they fail to take action to address their child’s behaviour.
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Gordon Smith described the scenes at Celtic Park on Saturday as “horrendous”.
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UK News
Bond market rout deepens as investors fear ‘stagflationary shock’ from higher oil prices – business live | Business
Bond market rout deepens as inflation fears keep rising
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
The bond market is doing its traditional job of intimidating governments – and investors – as fears of an inflation shock from the Iran war grow.
The bond sell-off which gripped the markets last week is continuing this morning, driving up governments’ cost of borrowing from Tokyo to Washington DC.
With the strait of Hormuz still largely closed, the prospect of a lengthy period of shortages of oil and gas, which would push up costs of energy, transport and food, is growing.
Last Friday, global government borrowing costs soared – with the yield (or interest rate) on Japan’s 30-year bond hitting 4% for the first time.
US and eurozone debt also suffered, as traders bet that central banks will fored to raise interest rates, or abandon hopes of rate cuts, to stem the inflationary waves hitting the global economy.
As analysts at ING put it:
First, even if the war were to end tomorrow, energy prices may not fall as far as many expect. Significant drawdowns in oil inventories are likely to keep upward pressure on prices for some time yet.
Second, natural gas prices currently look too low. There is meaningful upside risk if disruptions persist into the third quarter, particularly as competition intensifies between Asian and European buyers for LNG.
It’s a reminder that, for all the political noise, its energy prices will remain the dominant force for central banks. It’s why we’re expecting rate hikes from the Bank of England and European Central Bank in June, and why we no longer expect a Federal Reserve rate cut until December.
This morning… US and Japanese government bonds have extended their losses, pushing up yields (which rises when bond prices fall.)
Benchmark 10-year U.S. Treasury yields jumped to their highest since February 2025 this morning at 4.6310%.
Yields on the 30-year Japanese government bond hit the highest level on record at 4.200%, while while the 10-year yield reached its highest since October 1996 at 2.800%.
The agenda
Key events
FTSE 100 hits lowest since 31 March
Britain’s stock market has hit a six-week low at the start of trading in London.
The FTSE 100 index of blue-chip shares dropped to 10,151 points , a fall of 44 points of 0.4%.
UK housebuilders are among the big fallers, on concerns that higher interest rates will hit demand for homes and mortgages. BP (+2.2%) and Shell (+1.7%) are leading the risers as the oil price rises.
European stock markets are also weaker, with Germany’s DAX dropping almost 0.5% at the start of trading in Frankfurt.
Chris Beauchamp, chief market analyst at investing and trading platform IG, says:
“A combination of political turmoil and renewed gains for oil has been kryptonite for hopes of a new FTSE 100 rally.
Of course, the selling has not been confined to the UK, and continental indices are registering heavier losses as oil lurches higher once again. The market rally is rapidly coming to grips with the reality of the situation in the Middle East and in the global oil market, and it is not going to be pretty.”
Japan’s bond prices have been hit by the prospect of a debt-fuelled energy support package.
Today, prime minister Sanae Takaichi said she had told finance minister Satsuki Katayama last week to start work on compiling a supplementary budget, which could cushion the impact of the Middle East conflict on Japan’s economy.
According to Reuters, the extra budget will focus on funding government subsidies to curb gasoline and utility bills, as surging oil prices caused by the Middle East conflict cloud the outlook for an economy heavily reliant on fuel imports from the region.
The bond markets are signalling that we’re in a world of higher interest rates, geopolitical threats, expensive oil and uncertain politics.
Lale Akoner, eToro global market strategist, explains:
“Government bond yields are rising across the US, UK, Europe and Japan as investors reassess inflation risks, higher energy prices, political uncertainty and growing fiscal pressure. The move higher in yields suggests markets are increasingly accepting a ‘higher-for-longer’ interest rate environment.
“The concern for investors is that higher yields do not stay confined to bond markets. They can weigh on equity valuations, particularly in growth and technology sectors, while also increasing pressure on governments carrying large debt burdens.
“Markets are also becoming more sensitive to geopolitical risks. Rising oil prices and fears of disruption around the Strait of Hormuz are reviving inflation concerns at a time when many central banks were hoping price pressures would continue easing.
“For now, bond markets appear to be signalling that investors should prepare for a more volatile environment where higher borrowing costs remain a key market theme well into the second half of the year”.
Fears of ‘stagflationary shock’ hitting bonds
The jump in the oil price today has “exacerbated fears about a stagflationary shock” and pushed global bond yields even higher this morning, says Jim Reid of Deutsche Bank.
He told clients:
Admittedly, if you look over the entire conflict, bond yields have moved in lockstep with oil, and Friday doesn’t look too anomalous. However, if you zoom in a bit, then yields have shifted from being broadly in line with the current price of oil to looking a bit high relative to it. That suggests some evidence of a small decoupling on Friday.
With these end-of-week moves, 30yr US yields hit their highest level since 2007, 30yr Japanese yields their highest since their introduction in 1999, 30yr gilts reached levels last seen in 1997, and 30yr German yields returned to 2011 levels.
China heading for slowdown after April’s economic data disappoints
Weak economic data from China is also worrying investors this morning.
Chinese factory output growth slowed to 4.1%, year-on-year, in April, down from 5.7% in March, data from the National Bureau of Statistics (NBS) showed today. That was despite a jump in exports as customers tried to stockpile goods to avoid supply disruption from the Iran war.
Retail sales growth slowed to just 0.2% in April – the weakest reading since December 2022 – down from 1.7% in March.
China’s fixed asset investment declined – to a fall of 1.6% year-on-year in January-April, down from a 1.7% rise in January-March.
Lynn Song, ING’s chief economist for Greater China, says:
It suggests a steep drop-off of investment in April as geopolitical uncertainty may have weighed on investment decisions.
This disappointing April economic activity suggests growth will decelerate in the second quarter, after the first quarter comfortably beat expectations, Song adds.
Oil at near-two-week high
The oil price has risen this morning, which will put more pressure on government bond prices.
Brent crude is up 1.77% at $111.16 a barrel, its highest level in nearly two weeks.
Anxiety over the Iran war rose today after a nuclear power plant in the United Arab Emirates was attacked over the weekend.
Tony Sycamore, analyst at IG, says:
These attacks serve as a pointed warning: any renewed US or Israeli strikes on Iran could quickly trigger more proxy assaults on Gulf energy and critical infrastructure.
French finance minister: bonds are not collapsing
French finance minister Roland Lescure has revealed that G7 finance ministers will discuss the situation in the bond markets when they meet in Paris today.
Lescure argued that global bond markets are undergoing a correction.
Asked if bond markets were collapsing, Lescure told reporters:
“They’re undergoing a correction – I wouldn’t say they’re collapsing”.
“We are no longer in a period where public debt is not a subject.”
Burnham: I support the fiscal rules
The global bond market sell-off means this is a bad time for UK politics to be gripped by a leadership crisis.
British government debt got hammered on Friday, as Keir Starmer’s premiership circled the plughole and likely challenger Andy Burnham limbered up to return to parliament by contesting a by-election in Makerfield, in the North West of England.
The yields on 30-year UK debt hit their highest since 1998 last week, with 10-year gilt yields the highest since 2008.
Those losses came amid warnings that if Starmer is replaced, the Labour government might shift towards higher spending and borrowing, cutting loose from the fiscal rules designed to reassure the bond markets.
However, Burnham tried to calm concerns that he might drive up spending. Over the weekend he told ITV:
“I support the fiscal rules, there needs to be a plan to get debt down.”
That pledge might provide some support for UK bonds today….
Bond market rout deepens as inflation fears keep rising
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
The bond market is doing its traditional job of intimidating governments – and investors – as fears of an inflation shock from the Iran war grow.
The bond sell-off which gripped the markets last week is continuing this morning, driving up governments’ cost of borrowing from Tokyo to Washington DC.
With the strait of Hormuz still largely closed, the prospect of a lengthy period of shortages of oil and gas, which would push up costs of energy, transport and food, is growing.
Last Friday, global government borrowing costs soared – with the yield (or interest rate) on Japan’s 30-year bond hitting 4% for the first time.
US and eurozone debt also suffered, as traders bet that central banks will fored to raise interest rates, or abandon hopes of rate cuts, to stem the inflationary waves hitting the global economy.
As analysts at ING put it:
First, even if the war were to end tomorrow, energy prices may not fall as far as many expect. Significant drawdowns in oil inventories are likely to keep upward pressure on prices for some time yet.
Second, natural gas prices currently look too low. There is meaningful upside risk if disruptions persist into the third quarter, particularly as competition intensifies between Asian and European buyers for LNG.
It’s a reminder that, for all the political noise, its energy prices will remain the dominant force for central banks. It’s why we’re expecting rate hikes from the Bank of England and European Central Bank in June, and why we no longer expect a Federal Reserve rate cut until December.
This morning… US and Japanese government bonds have extended their losses, pushing up yields (which rises when bond prices fall.)
Benchmark 10-year U.S. Treasury yields jumped to their highest since February 2025 this morning at 4.6310%.
Yields on the 30-year Japanese government bond hit the highest level on record at 4.200%, while while the 10-year yield reached its highest since October 1996 at 2.800%.
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