Signs of cooperation from Moscow and the rebels have lifted the mood of investors as stocks in Asia rebound and the S&P closes at a record high. However the EU has so far failed to come to a conclusion on sanctions. Michael Hewson, Market Analyst at CMC Markets says the inability to come to a meaningful agreement is helping the 'risk off' trade stabilise.

SHOWS: LONDON, ENGLAND, UK (REUTERS - ACCESS ALL) (JULY 23, 2014)

1. CMC MARKETS, MARKET ANALYST, MICHAEL HEWSON:

JOURNALIST ASKING MICHAEL HEWSON: 'Michael, I just want to quickly ask you, the fact that the EU has so far failed to come to a conclusion on sanctions, does this mean that the EU's credibility is eroded, they're in danger of losing all credibility now?'

MICHAEL HEWSON: 'I think, Angeline, I think it's very easy to look at the EU response and then essentially say that the foreign ministers are a paper tiger. But I think it's very, very difficult when you've got 28 different countries trying to get their companies' worth into a strategic policy response. But absolutely, you're right. I think markets are looking at what the EU can achieve and what they have achieved is essentially brought forward, what they agreed prior to the downing of MH17 on Thursday. What they haven't agreed upon is what we call Tier 3 sanctions and that would be really much more aggressive targeted sanctions across a whole range of different sectors of the Russian economy. That being said and I think that does account for the fact that we've seen, I think, the risk-off trade slightly stabilise in the past few days, I think markets are looking at the EU policy response and basically taking the view, quite rightly in my view that it's going to be very, very difficult to come out with a strategically coherent response to that. Having said that, on the topside of the equation, we've seen the S&P hit record highs. What we haven't seen is European markets do the same thing. So I certainly think there's still an element of caution on the part of investors with respect to piling back into equities at this time.'

JOURNALIST: 'And relating to markets and investors and how they're relatively benign, I just- out of curiosity I want to ask you a question about France selling that warship to Russia. Do you think that it would be a different story if France had lost more than half the passengers, more than half the passengers being its citizens on MH17?'

MICHAEL HEWSON: 'I think undoubtedly. I think French public opinion would force the politicians' hands and I certainly think that that French politician's remarks were, I think, completely out of line in the context of what's going on. We've seen an airline full of innocent people shot down and all the French can think about is their own narrow self-interest. Now, I think you can probably read that across a lot of EU policymakers and I certainly think that's what's also tempering Germany's response. But I think something like this basically has to overcome economic hurdles. And you really do have to draw a line in the sand because essentially, I think unless you come up with a coordinated policy response, you're not going to concentrate the minds in Moscow and that, I think above all else, is what really needs to happen.'