Ukraine War End? European Markets Hit 'All-Time High' on Defense Stock Rally... Korea-US 'Trump Tariff' Discussions [Morning Briefing]

◆ US Markets Closed... European Markets Hit 'Record Highs'

While US markets were closed for Presidents' Day (third Monday in February) on the 17th local time, European markets broke record highs. The pan-European STOXX 600 index jumped 0.54% to reach an all-time high, while Germany's DAX rose 1.26%, France's CAC 0.13%, and UK's FTSE gained 0.41%. This rally was led by defense stocks as European leaders discussed regional defense and military spending related to the Ukraine war. Market experts predict that defense and aviation stocks will continue to show strength, entering a 'super cycle' due to significant increases in defense budgets over security issues.

◆ Vice Minister Visits US... Discussing 'Trump Tariff' Issues

Vice Minister Park Jong-won of the Ministry of Trade, Industry and Energy visited the US on February 17th local time to discuss tariff issues from the Donald Trump administration. This visit aims to initiate discussions between the two countries as the US has signaled mutual tariffs and potential duties on automobiles, steel, and aluminum. Korea's requests for tariff exemptions in certain sectors are expected to be discussed. Vice Minister Park stated, "We will create a forum for discussion beneficial to both countries by listening to the US position and explaining our stance and opinions well." Follow-up discussions are likely, including a possible US visit by Industry Minister Ahn Deok-geun before any mutual tariffs are implemented.

◆ US Special Envoy: "Won't Force Peace Agreement on Ukraine"

Keith Kellogg, US Presidential Special Envoy for Ukraine and Russia, emphasized during his visit to NATO headquarters in Brussels, Belgium on the 17th local time that "there will absolutely be no forcing of a peace agreement on Ukraine." This statement shows a temperature difference from US Defense Secretary Pete Heggseth's earlier comments drawing lines on Ukraine's peace terms including NATO membership and territory restoration, with Kellogg stating "everything is still up for discussion." This is interpreted as addressing concerns that the Trump administration might only accept Russian demands or bypass Europe.

◆ Rubio-Bin Salman Meeting... Explaining 'Gaza and Ukraine Initiative'

US Secretary of State Marco Rubio, during his Middle East tour, met with Saudi Crown Prince Mohammed bin Salman on the 17th local time. The meeting reportedly covered ways to strengthen bilateral relations and discussed regional and international issues, including the Trump administration's plans for Gaza Strip ceasefire and ending the Ukraine war. Secretary Rubio, who met with Israeli Prime Minister Benjamin Netanyahu on the 16th, is scheduled to meet with a Russian delegation in Riyadh, Saudi Arabia on the 18th, along with US Middle East Special Envoy Steve Whitkoff, to discuss ways to end the Ukraine war.

◆ Cold and Windy Weather Despite 'Rain Water' Season

Despite being 'Rain Water' (雨水) on the 18th, the seasonal point when snow typically melts, chilly weather will continue. Daytime highs are forecast at 0-6 degrees Celsius, but strong winds will make it feel colder. Particularly, the west coast of Chungnam, Jeolla coastal areas, and Jeju Island may see strong wind advisories issued from the afternoon due to very strong winds. Fine dust levels are expected to remain 'good' or 'moderate' across all regions due to effective air dispersion.

Kim Bong-gu, Hankyung.com Reporter kbk9@hankyung.com