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Ukraine and Russia exchanged 300 prisoners of war each on Friday during the second day of a two-day swap, with several of the released soldiers having been held since the early stages of the war in 2022. The exchange followed Thursday’s swap of 200 POWs from each side, marking the second such prisoner exchange between the two countries in 2026.

Ukrainian President Volodymyr Zelenskyy said the returning soldiers had fought in key war zones including Donetsk, Luhansk, Kharkiv, Zaporizhzhia, Kherson and Mariupol, with many spending more than a year in captivity. He also confirmed that two Ukrainian civilians were returned as part of the exchange.

Russia’s defence ministry said the United States and the United Arab Emirates helped mediate the swap. The exchange came after recent peace talks between Kyiv and Moscow, though a planned new round of negotiations was postponed amid escalating tensions in the Middle East.

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A 23-year-old police officer, identified as Viktoria Shpylka, was killed and 25 others were injured after two homemade explosive devices detonated in the western Ukrainian city of Lviv. According to the National Police of Ukraine, the explosives were hidden in waste bins and exploded shortly after officers responded to a reported overnight break-in at a shop in the city centre. Several officers were among the injured, with some reported to be in serious condition.

Ukrainian authorities described the incident as a terrorist attack and quickly detained a 33-year-old suspect from the Rivne region. President Volodymyr Zelensky confirmed the arrest and said investigators believe the suspect acted on instructions from Russian special services. Officials are continuing efforts to identify possible accomplices, while prosecutors have opened a terrorism investigation into the deadly attack.

The bombing comes amid ongoing conflict between Ukraine and Russia, as the country faces intensified missile and drone strikes ahead of the fourth anniversary of Russia’s full-scale invasion ordered by Vladimir Putin. Ukrainian officials reported dozens of aerial attacks targeting infrastructure and residential areas, highlighting continued security threats as Russia maintains control over parts of Ukrainian territory, including the annexed region of Crimea.

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Nvidia is set to release its quarterly earnings next week, a highly anticipated event as investors assess the strength of artificial intelligence-driven growth and its impact on global markets. The chipmaker, currently the world’s most valuable company, has seen its shares surge since the rise of AI technologies, but momentum has slowed in 2026 amid concerns about returns on massive AI investments. Investors will also monitor results from major software firms like Salesforce and Intuit, as AI disruptions reshape the broader technology sector.

Beyond corporate earnings, geopolitical tensions continue to influence market sentiment, particularly as the fourth anniversary of Russia’s invasion of Ukraine approaches. Ongoing conflict, uncertainty over ceasefire efforts, and rising tensions involving Iran have contributed to volatility in oil prices, defence stocks, and gold. Global investors are increasingly concerned about overlapping geopolitical risks, including conflicts in multiple regions and their potential economic consequences.

At the same time, key economic data and political developments are expected to shape central bank policies and investor outlooks worldwide. Inflation data in Australia and Tokyo will be closely watched for clues on future interest rate hikes, while leadership uncertainty in the European Central Bank and political pressure on UK Prime Minister Keir Starmer could influence bond markets and currencies. Together, corporate earnings, economic indicators, and political events are set to play a decisive role in shaping global financial markets in the coming weeks.

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U.S. Ambassador to NATO Matthew Whitaker has cast doubt on Russia’s claim that Ukraine carried out a drone attack on President Vladimir Putin’s residence, saying it remains unclear whether such an incident even occurred. Speaking in an interview, Whitaker said he was waiting for confirmation from U.S. and allied intelligence services, noting that Ukraine has firmly denied any involvement in the alleged attack.

Russia alleged that Ukraine launched 91 long-range drones at a presidential residence in the Novgorod region and warned that it would retaliate and harden its negotiating position in peace talks. Ukraine dismissed the accusation as false and said Moscow has produced no evidence to support its claims. Ukrainian officials described the allegation as an attempt to justify further Russian attacks and avoid meaningful steps toward ending the war.

U.S. President Donald Trump said Russian President Vladimir Putin raised the issue during a phone call, adding that he was angry about the reported incident but acknowledged that the facts were still being verified. The White House and U.S. intelligence agencies declined to comment further. Whitaker stressed that any conclusions would depend on intelligence assessments, as diplomatic efforts continue amid signs that Washington and Kyiv may be close to a broader peace agreement despite unresolved territorial disputes.

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Pope Leo has expressed deep sadness over Russia’s refusal to agree to a Christmas ceasefire in its nearly four-year-long war with Ukraine. Speaking to journalists outside his residence in Castel Gandolfo, Italy, the pontiff said the decision was particularly disheartening given the symbolic importance of Christmas as a time for peace and reflection.

The Pope appealed once again to global leaders and “people of good will” to respect at least Christmas Day as a pause in hostilities. He urged all sides involved in conflicts to consider a temporary ceasefire, even if only for 24 hours, as a gesture of humanity and compassion during the Christian holy period.

Pope Leo, the first pontiff from the United States, said he hoped his renewed appeal would be heard and lead to a brief moment of peace, not only in Ukraine but across the world. His comments come amid continued fighting and international calls for restraint during the festive season.

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The Kremlin said on Sunday that recent changes proposed by Europe and Ukraine to U.S.-drafted plans aimed at ending the war in Ukraine have not improved the prospects for peace. Russian President Vladimir Putin’s top foreign policy aide, Yuri Ushakov, said Moscow remains unconvinced that the revised proposals would help achieve a lasting settlement, reflecting Russia’s continued scepticism toward European and Ukrainian involvement in shaping the peace framework.

The original U.S. proposals, which were leaked last month, sparked concern among European and Ukrainian leaders who feared they were overly favourable to Russia and could pressure Kyiv into excessive concessions. In response, European and Ukrainian negotiators have held talks with envoys from U.S. President Donald Trump’s administration to introduce their own amendments, though the precise details of the updated proposals have not been made public. Ushakov said he had not yet seen the full documents but was confident the changes would not enhance the chances of long-term peace.

His remarks came after Putin’s special envoy Kirill Dmitriev held talks in Florida with U.S. special envoy Steve Witkoff and Trump’s son-in-law Jared Kushner. Dmitriev is expected to report back to Putin on the discussions, after which Moscow will decide its next steps in contacts with Washington. The talks underscore the high stakes surrounding whether the war—the deadliest in Europe since World War Two—can be brought to an end, the future of Ukraine, and whether any U.S.-brokered deal would be durable.

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Russian President Vladimir Putin has said Russia would not launch any new wars after Ukraine if Western countries treat Moscow with respect and acknowledge its security interests. Speaking during his annual “Direct Line” televised marathon, Putin dismissed claims that Russia plans to attack Europe as “nonsense” and said further military operations could be avoided if the West stopped what he described as deception, particularly over Nato’s eastward expansion.

Answering questions from the BBC and other international journalists, Putin repeated that Russia was open to ending the war in Ukraine “peacefully,” but only on its own terms. He reiterated demands that Ukrainian forces withdraw from regions partially occupied by Russia and abandon efforts to join Nato. Putin also claimed Russian forces were advancing on the battlefield and insisted that responsibility for blocking peace lay with Western governments and Ukraine’s European backers, not Moscow.

The lengthy broadcast, which mixed foreign policy with domestic concerns, came as fighting in Ukraine continued, with Ukrainian officials reporting deadly Russian missile strikes hours after the event. Putin acknowledged economic pressures at home, including rising prices and higher taxes, while portraying Russia as resilient. He concluded by saying Russia was ready to cooperate with the US, Europe, and the UK as equals, provided its long-term security was guaranteed, accusing the West of deliberately turning Russia into an enemy.

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Two individuals suspected of espionage and sabotage activities targeting German military support for Ukraine have been apprehended in Bavaria, Germany. Described as dual German-Russian nationals, they were arrested in Bayreuth on suspicion of spying for Russia, including scouting potential targets such as US military facilities in Germany. The main suspect, Dieter S, is accused of various offenses, including planning explosions, arson, and maintaining contact with Russian intelligence. He is also alleged to have participated in a Russian proxy armed force in eastern Ukraine from 2014 to 2016.

The second suspect, Alexander J, is accused of assisting Dieter S in identifying potential targets. Germany, as the second largest donor of military aid to Ukraine after the US, has earmarked significant funds for this purpose. The suspects are accused of discussing sabotage operations to undermine Germany’s support for Ukraine, particularly targeting military and industrial infrastructure. The arrests are seen as a significant success in combating Russian espionage networks, according to German officials.

These developments come amidst ongoing efforts by Germany to bolster Ukraine’s air defenses, with plans to provide additional Patriot systems. The arrests follow other notable espionage cases in Germany, including a German national suspected of passing information to Russian diplomats and the former CEO of Wirecard, who is believed to have fled to Moscow and is now suspected of being a Russian spy.

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Ukraine’s President Volodymyr Zelensky has announced the removal of Defense Minister Oleksii Reznikov from his position. Reznikov had been in charge of the defense ministry since before Russia’s full-scale invasion in February 2022. President Zelensky cited the need for “new approaches” in the defense ministry and nominated Rustem Umerov, head of Ukraine’s State Property Fund, as Reznikov’s successor.

Reznikov, who had developed strong relationships with senior politicians in London, is rumored to become Ukraine’s new ambassador to the United Kingdom. While he was internationally recognized for his role in lobbying for additional military equipment, his dismissal had been anticipated, with Reznikov himself exploring other positions within the Ukrainian government.

The cabinet reshuffle is not expected to bring significant changes to Ukraine’s battlefield strategy, as General Valery Zaluzhny continues to oversee the campaign as the commander of Ukraine’s armed forces. Reznikov’s dismissal is part of a broader anti-corruption effort in President Zelensky’s administration, as Ukraine aims to address corruption issues to join Western institutions like the EU.

Although Reznikov himself is not personally accused of corruption, the Ministry of Defense had faced scandals related to the procurement of goods and equipment for the army at inflated prices. Earlier this year, Reznikov’s deputy resigned amidst such allegations.

In addition to the anti-corruption drive, Ukraine is engaged in a slow and bloody counter-offensive with advanced weapons received from Western allies. Ukrainian forces have reported breaking through key Russian defenses in the south of the country, while Russia has reported attempted drone attacks on its territory and launched an attack on the Izmail port, one of Ukraine’s major grain-exporting ports on the Danube River.

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