OPINION
Market Rating Before FOMC MeetingJan 31
Ukraine-Russia standoff: Putin recognizes 2 breakaway regions as independent
Although there have been calls for negotiations from various authorities to reduce tensions on Russia – Ukraine line, which has been the focus of global markets for a long time, conflict continues.
Tensions escalated when the Russian army killed 5 Ukrainians trying to illegally cross the border of Rostov region yesterday. After the incident Russian President Vladimir Putin addressed the nation and the President signed decrees recognizing 2 breakaway regions as independent regions. Putin also ordered Russian forces to "perform peacekeeping functions" in eastern Ukraine's breakaway regions, leading to concerns and reactions all around the world.
White House spokesperson Jen Psaki expressed her concerns by noting that they expect such a step from Russia. President Biden took a concrete step against Russia and signed an executive order barring new investment, trade and financing to, from, or in Ukraine's breakaway regions.
Chinese Foreign Minister Wang Yi, who held a telephone call with US Secretary of State Antony Blinken, said that they will continue to communicate all parties regarding the issue. In Japan, one of the leading countries in Asia, Prime Minister Fumio Kishida noted that Russia violated international law and Japan would respond with strong measures including sanctions.
Putin is “plainly” breaking international law, UK Prime Minister Boris Johnson said, and British Foreign Secretary Liz Truss said they would announce 'new sanctions' on Russia in response to attacks on Ukraine's sovereignty and territorial integrity. In addition, Boris Johnson will chair a meeting of the UK's emergency Cobra committee on Tuesday morning to sign off a package of sanctions against Russia.
German Chancellor Olaf Scholz said that they agreed on the steps to be taken in the future with US President Joe Biden and French President Emmanuel Macron, so that Putin's decision would not remain unanswered. Meanwhile, Ursula von der Leyen, President of the European Commission, strongly condemned Russia's decision on the recognition of Donetsk and Luhansk as People's Republics, and stated that those involved in this illegal act would face with sanctions.
EU High Representative Josep Borrell, another important figure of the European politics, said that the EU is expected to take a decision on sanctions against Russia today. Secretary-General of the United Nations Antonio Guterres also expressed huge concern about the Russian Federation's decision on the status of Donetsk and Luhansk regions of Ukraine, which is inconsistent with UN principles.
Finally, Ukrainian President Vladimir Zelenskiy noted that the responsibility for the decision taken rests solely with Russia, adding that Ukrainian borders are well protected and they are not afraid of anything.
Financial markets are of the opinion that the war is at the door and investors' increasing stress levels lead to strong bearish pressure, particularly in emerging markets. The losses of MOEX, the Russian benchmark index, are approaching 7 percent and the decline since February 16 has exceeded 26 percent.
Against the dollar, Russian ruble hit the bottom by reaching the lowest level since November 2020, 80.41 level, and supply concerns raised by the moves of the leader of OPEC+ pushed crude oil prices to 94.65, the highest level of the last 7 years.
Tensions escalated when the Russian army killed 5 Ukrainians trying to illegally cross the border of Rostov region yesterday. After the incident Russian President Vladimir Putin addressed the nation and the President signed decrees recognizing 2 breakaway regions as independent regions. Putin also ordered Russian forces to "perform peacekeeping functions" in eastern Ukraine's breakaway regions, leading to concerns and reactions all around the world.
White House spokesperson Jen Psaki expressed her concerns by noting that they expect such a step from Russia. President Biden took a concrete step against Russia and signed an executive order barring new investment, trade and financing to, from, or in Ukraine's breakaway regions.
Chinese Foreign Minister Wang Yi, who held a telephone call with US Secretary of State Antony Blinken, said that they will continue to communicate all parties regarding the issue. In Japan, one of the leading countries in Asia, Prime Minister Fumio Kishida noted that Russia violated international law and Japan would respond with strong measures including sanctions.
Putin is “plainly” breaking international law, UK Prime Minister Boris Johnson said, and British Foreign Secretary Liz Truss said they would announce 'new sanctions' on Russia in response to attacks on Ukraine's sovereignty and territorial integrity. In addition, Boris Johnson will chair a meeting of the UK's emergency Cobra committee on Tuesday morning to sign off a package of sanctions against Russia.
German Chancellor Olaf Scholz said that they agreed on the steps to be taken in the future with US President Joe Biden and French President Emmanuel Macron, so that Putin's decision would not remain unanswered. Meanwhile, Ursula von der Leyen, President of the European Commission, strongly condemned Russia's decision on the recognition of Donetsk and Luhansk as People's Republics, and stated that those involved in this illegal act would face with sanctions.
EU High Representative Josep Borrell, another important figure of the European politics, said that the EU is expected to take a decision on sanctions against Russia today. Secretary-General of the United Nations Antonio Guterres also expressed huge concern about the Russian Federation's decision on the status of Donetsk and Luhansk regions of Ukraine, which is inconsistent with UN principles.
Finally, Ukrainian President Vladimir Zelenskiy noted that the responsibility for the decision taken rests solely with Russia, adding that Ukrainian borders are well protected and they are not afraid of anything.
Financial markets are of the opinion that the war is at the door and investors' increasing stress levels lead to strong bearish pressure, particularly in emerging markets. The losses of MOEX, the Russian benchmark index, are approaching 7 percent and the decline since February 16 has exceeded 26 percent.
Against the dollar, Russian ruble hit the bottom by reaching the lowest level since November 2020, 80.41 level, and supply concerns raised by the moves of the leader of OPEC+ pushed crude oil prices to 94.65, the highest level of the last 7 years.
