Ukraine Peace Settlement and Markets

FREE: Get Our Daily SITREP (Situation Report) Newsletter

Ukraine Peace Settlement and Markets
Video Shows Why Diversifying Isn’t as Important as You Thought

China Is Not Coming to Putin’s Rescue

Vladimir Putin went to China to sign deals for selling oil, coal, and grain to China. There was a lot of talk about solidarity between the two countries but when Putin asked Xi for help with his war that was a different matter. Russia has an economy about the size of Spain. China’s biggest markets are the EU followed by North America. The crackdown their tech sector has torpedoed that section of their market and their “zero tolerance” approach to Covid has hurt their economy. Putin’s internal crackdown on the media will only work for so long before Russians burying their dead wake up to the lies State Media is telling. India buying more oil from Russia will not save the day. Putin is being backed into a corner.

What Shape Would a Peace Deal Take?

Despite threats about using tactical nukes, chemical weapons, or biological weapons, Putin likely realizes that none of these options will save the day for him. As such we are seeing a glimmer of hope coming out of talks between Ukraine and Russia being held in Istanbul. Ukrainian soldiers found dress uniforms when they overran Russian positions on the outskirts of Kyiv. Russia expected to parade down the streets of Ukraine’s capital city much like Hitler parading down the Champs Elyse in Paris after a successful blitzkrieg. That option is gone for Putin. Likewise, as Ukraine forces take back territory around Kyiv and largely stand their ground in the south and east, they are less likely to agree to give up any territory at least as an initial negotiating position. We are back to a situation in which keeping Putin in power in Russia is likely to be the most important part of any deal for the Russian dictator.

Ceasefire, Partition of Ukraine, Sanctions on Russia, and the Markets

The first and perhaps easiest step of a negotiated settlement would be at least a temporary ceasefire during which civilians could get out of cities like Mariupol which have been utterly devastated. What Russia will likely aim for is to hold on to part of eastern Ukraine including Crimea, the Donbas region they already claim, and probably Mariupol so that Crimea has a land bridge to Russia. The issue here is that after so many deaths, so much devastation, Ukraine does not want to give up an inch of territory to Russia. The prospect of a North and South Korea situation is not pleasing to anyone in the West as it simply extends the conflict indefinitely. Ukraine has already said that any deal with Russia needs to be backed up by a guarantor such as the US, UK, France, Germany, and others to enter Ukraine and defend it should Russia break any deal. How the markets react to a true ceasefire will likely be positive. How they would react to a permanent partition of Ukraine would also likely be positive if it were to happen quickly enough so that Ukraine’s planting and harvest can go forward to avoid a global food shortage. The fly in the ointment is how sanctions on Russia would be dealt with. That issue is likely to gum up the works for some time to come and cause market volatility whenever the issue is raised.

Complimentary Training: Discover My Top Gun Tactics for Big Market Moves

--

--

CEO TOPGUN Options, chairman & founder No Fallen Heroes Foundation, ONN.tv founder and CEO, Former F/A-18 USN fighter pilot, TOPGUN (adv) graduate. Father of 3.

Love podcasts or audiobooks? Learn on the go with our new app.

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Matthew "Whiz" Buckley

Matthew "Whiz" Buckley

CEO TOPGUN Options, chairman & founder No Fallen Heroes Foundation, ONN.tv founder and CEO, Former F/A-18 USN fighter pilot, TOPGUN (adv) graduate. Father of 3.