Russia tells U.S. envoy ties close to rupture after Biden's comments
Russia's foreign ministry said on Monday it had summoned U.S. Ambassador John Sullivan to tell him that remarks by President Joe Biden about Russian President Vladimir Putin had pushed bilateral ties to the brink of collapse.
President Biden said last week that Putin was a "war criminal" for sending tens of thousands of troops into Ukraine.
"Such statements from the American president, unworthy of a statesman of such high rank, put Russian-American relations on the verge of rupture," the ministry said in a statement.
The Kremlin earlier described the comments as "personal insults" against Putin.
The ministry also told Sullivan that hostile actions against Russia would receive a "decisive and firm response".
Russia sent tens of thousands of troops into Ukraine on Feb. 24 in what it called a special operation to degrade its southern neighbour’s military capabilities and root out people it called dangerous nationalists.
Ukrainian forces have mounted stiff resistance against Russian forces and the West has imposed sweeping sanctions on Moscow in an effort to force it to withdraw.
Fertiliser prices hit record on Russia supply concerns
Fertiliser prices are breaking new records as supplies from Russia, the leading exporter, has dwindled, adding further to fears over food security.
Russia’s export ban this month — including key crop nutrients containing nitrogen, potash and phosphates — has sent prices soaring, while farmers were already facing high fertiliser costs because of sanctions on Belarus, a leading potash producer and export restrictions by China.
In Europe, soaring natural gas prices, the main ingredient for nitrogen crop nutrients, have meant that producers including Yara have reduced their output.
The fertiliser index from CRU, a consultancy, has risen 30 per cent since the start of the year, and is now higher than the levels reached during the food and energy crisis when prices jumped in 2008.
Higher fertiliser prices mean costs of production globally will increase, affecting the quality of crops. “Yields could be lower if farmers choose or are forced to reduce fertiliser applications, potentially impacting global production,” warned AHDB, a UK farmers’ advisory organisation.
Ukraine accuses Russia of illegally deporting children from Mariupol
Kyiv on Monday accused Moscow of illegally deporting Ukrainian children to Russia, amid reports that troops in Mariupol were directing civilians to evacuate to the Russian-controlled breakaway eastern regions of Donbas.
“According to the information received, on March 19, the Russian occupation forces illegally deported 2,389 children to the territory of the Russian Federation who were in the temporarily occupied districts of Donetsk and Luhansk regions,” said Ukraine’s foreign ministry in a statement.
“The forcible transfer of civilians to the territory of the aggressor state, including children, shows signs of abduction. Such actions are a gross violation of international law, in particular international humanitarian law,” Ukraine’s foreign ministry added.
The ministry said that “by destroying homes and killing parents, Russia is depriving Ukrainian children of parental care and putting their lives in further danger in Russia.”
The ministry continued: “We call on the international community to respond immediately to the illegal removal of children, to increase pressure on Russia to force it to end the barbaric war against the Ukrainian people.”
Russian news agency Interfax reported on Monday that 450 people, including 100 children, had been evacuated from Mariupol, citing a statement from the territorial defence headquarters of the Donetsk People’s Republic.
The Ukrainian and Russian claims could not be independently verified.
Vitol calls on regulators to maintain ‘integrity of financial markets’ after Ukraine invasion
The world’s biggest independent oil trader has called on regulators to maintain the “integrity” of the financial markets that underpin the global trading of commodities.
In its annual results statement on Monday, Vitol said policymakers needed to consider “market integrity and liquidity” on futures exchanges, which are used by the industry to manage price risk.
“Last year the gas and power markets experienced unprecedented levels of volatility, testing the resilience of markets and their participants,” the privately owned company said in its statement. “This period highlights the need for regulators to consider market integrity and liquidity during times of severe stress.”
The comments from Vitol speak to the concern felt by the commodity trading industry, which has faced huge demands for cash to cover hedging positions.
This month, Europe’s largest energy traders asked governments and central banks to provide “emergency” assistance to avert a potential cash crunch as sharp price moves triggered by the Ukraine crisis strained markets.
Exchanges play a vital role in global commodity markets by providing trading houses with futures contracts to manage risk. Without these instruments, most traders would not be able to move physical commodities.
That makes margin requirements — or demands for more cash — and clearing limits on commodity futures critical to global flows of oil and gas.
Demands for extra cash to cover short positions soared this month as commodity prices jumped following Russia’s invasion of Ukraine, forcing some traders to unwind positions.
Ukraine says at least 115 children killed in Russian invasion
Russia’s invasion of Ukraine has claimed the lives of more than 100 children, Ukrainian authorities said on Monday.
In a statement, Ukraine’s general prosecutor’s office said that “115 children died in the armed aggression by the Russian Federation on Ukraine”.
“The number of injured children has increased to 148,” the statement added.
Suggesting that the actual figures may be higher because of difficulties in confirming details in a war zone, the prosecutor’s office said the largest number of confirmed victims was 58 in Kyiv, the capital city where Russian forces last week targeted residential and public areas with shelling and rockets.
The eastern city of Kharkiv has recorded 38 child deaths, which has been under fire in recent weeks. Donetsk has seen 29 child deaths and Chernihiv 31.
Ukrainian authorities also warned of casualties from the bombing of an art school in Mariupol, “where about 400 Mariupol residents, women, children and the elderly, were hiding. The building was destroyed, people were under its rubble, but there is no information about the victims,” the statement said.
“The bombings and shelling have so far damaged 530 educational institutions, 72 of which have been completely destroyed — most in Donetsk, Kharkiv, Mykolayiv, Sumy, Kyiv, Kherson, Chernihiv and the Kyiv region. In addition, more than 40 children’s facilities were destroyed and damaged, including medical facilities, art schools, sports facilities, and libraries,” the statement added.
Russian and Ukrainian military claims cannot be independently verified.
Russian rouble bonds fall in price as trading resumes
Russia’s rouble-denominated bonds dropped on Monday as trading resumed for the first time since the invasion of Ukraine, in the first tentative steps towards reopening Moscow’s financial markets.
Yields on the benchmark 10-year bond, which rise as prices fall, climbed as high as 19.7 per cent in pre-market trading before settling back to 13.5 per cent, roughly 1.4 percentage points higher than the last trading day on February 24, according to Refinitiv data.
One investor said brokers were quoting higher yields of more than 15 per cent shortly after the market reopened, with large gaps between bid and offer prices. It is unlikely that the restart to trading will allow foreigners to buy and sell Russia’s local currency government bonds, given the difficulty in settling transactions, the investor said.
Securities depositories Euroclear and Clearstream stopped accepting payments in roubles in early March, in effect trapping foreign investors in the local debt market, where they held bonds worth $41bn at the start of the year.
The Russian central bank announced the resumption of trading on Friday, and said it would purchase rouble bonds “in order to neutralise excessive volatility and provide balanced liquidity”.
Zelensky urges Germany to back Ukraine’s EU bid and freeze business with Russia
Ukraine’s president has urged Germany to do more to help stop Russia’s invasion and approve Kyiv’s bid to be accepted as a member of the EU.
In a video to citizens of Germany — a country that has opposed Kyiv joining Nato and has expressed reservations over its EU bid — Zelensky said: “All of our values are all of your values . . . we are a part of Europe. And you see our desire to be in Europe, which we are fighting for on the battlefield.”
Germans could back Ukraine “by expressing your own thoughts and words through pressure on [your] politicians to that Ukraine can once and for all become a part of the EU”, he added.
Speaking weeks after Ukraine on February 28 formally submitted an application to join the EU, Zelensky said: “Nobody has the right to destroy a people and tear apart Europe.”
He also urged Germans to pressure their politicians into cutting all economic relations with Russia.
He said: “We warned your politicians that this is dangerous when Moscow decides what natural gas you get and at what price. We said sanctions were needed to prevent this war. Please don’t sponsor the war machine of this country, Russia. The occupier should not get a single euro.
“Close all of your ports to them. Don’t supply them with goods. Refuse Russian energy resources. Pressure Russia to leave Ukraine. I believe and know that peace is possible but you need to act for us to get peace,” he said.
Egypt devalues pound after Ukraine war hits economy
Egypt devalued its currency and raised interest rates on Monday as the central bank moved to contain the impact of the war in Ukraine on the country’s economy.
The Central Bank of Egypt raised interest rates 100 basis points, increasing the deposit rate to 9.25 per cent and the lending rate to 10.25 per cent. It also devalued its currency 10.67 per cent, causing the pound to sink against the dollar. After the decision, the US currency was worth E£17.42 compared with E£15.66 earlier on Monday.
The country’s economy has been hit by rising commodity and energy prices because of Russia’s invasion of Ukraine. Egypt is the world’s largest wheat importer and maintains a subsidised bread programme that feeds 70mn people. The country also relies on imports for its oil needs.
Analysts had expected the rate increase, but the timing came as a surprise because the bank’s monetary committee was due to meet on March 24.
The central bank said it was “keen on safeguarding the achieved macroeconomic stability”, and it stressed the importance of the role of the currency’s exchange rate as a shock absorber.
“Rising international commodity prices resulting from further supply chain disruptions in addition to increased risk-off sentiment have added to domestic inflationary pressures as well as external imbalances,” said the bank after an “exceptional meeting”.
Kristalina Georgieva, managing director of the IMF, warned earlier this month the countries that rely on food and oil imports would feel the impact of the war severely.
European shares muted after strongest weekly advance since 2020
European equities were muted on Monday, following their best week since 2020, as a rally driven by prospects of peace in Ukraine stalled and the benchmark oil price rose above $110 a barrel.
The regional Stoxx 600 share index, which last week wiped out all its losses incurred since Russia invaded its neighbour in February, added 0.1 per cent, Germany’s Xetra Dax traded flat, while London’s FTSE 100 added 0.5 per cent.
Brent crude rose 3.9 per cent to $112.2 a barrel, topping $110 for the first time in more than a week, due to renewed anxieties about global supply shortages.
The moves came as fierce fighting engulfed the Ukrainian port city of Mariupol overnight, even after Turkey, which is mediating peace talks between Russia and Kyiv, claimed the two countries were converging on key aspects of an agreement.
Futures trading implied Wall Street’s S&P 500 share index, which also closed out its best week since November 2020 on Friday, would fall 0.1 per cent in early New York dealings.
In Asia, Hong Kong’s Hang Seng lost 0.9 per cent with steeper drops for Chinese tech and property stocks. The fall followed a Chinese market rally last week after Beijing said it would introduce “favourable” measures to support the economy and financial markets.
Russia says missile strike hit ‘foreign mercenary’ training centre
Russia’s defence ministry said that its cruise missiles had struck a military training centre for “foreign mercenaries” and Ukrainian troops in the Rivne area of northwestern Ukraine.
The attack in Rivne took place overnight, the ministry said on Monday, and targeted the Nova Liubomirka training range.
Russia last week
struck a military base near the Polish border that had been used in the past by western instructors in an attack widely read as a warning to the Nato alliance.
The head of Rivne region Vitaliy Koval confirmed that two missile strikes had hit military training areas, but did not disclose the number of victims.
The defence ministry on Monday also accused Ukraine of staging an explosion at a chemicals plant in the northeastern city of Sumy, after an ammonia leak was reported in the early hours during fierce fighting there.
The Sumy regional governor Dmytro Zhyvytskyy said that a leak had been reported at the Sumykhimprom chemicals plant at 4.30am, endangering a 5km radius around the area.
Zhyvytskyy later reported that by 7.50am, the leak had been eliminated and there was no threat to the city’s population.
Sumy, located north of Kharkiv and 30km from the Russian border, has been the site of intense battles.
Russia’s defence ministry said the plant had been mined and the leak was caused intentionally by the Ukraine side.
Russian and Ukrainian military claims cannot be independently verified.
Do not expect the war in Ukraine to end quickly
Peace talks or turmoil in Russia could halt the conflict, but the likeliest outcome is many more months of fighting
“Tell me how this ends?” is one of those things that people say in films — and sometimes also in real life. It is the crucial question about the war in Ukraine — but one that is sometimes obscured by the sheer drama and horror of day-to-day events.
Just before the outbreak of the war, most military experts
expected a swift Russian military victory. That turned out to be wrong — and there will be more surprises in store. So all predictions have to be made with humility.
That said, there are three Ukraine scenarios which currently seem most likely. The first — which is both the most tragic and the most probable — is that this war continues for many months. The second possibility — put it at maybe 30 per cent — is that there is a peace settlement. The third scenario — which is perhaps 10 per cent — is that there is some sort of political upheaval in Russia, involving the overthrow of President Vladimir Putin and a new approach to Ukraine.
The long, grinding war scenario assumes that neither Russia nor Ukraine is now capable of achieving total victory and that neither is prepared to concede defeat. Putin is fighting to save his political life and the Ukrainians are fighting to save their country.
After almost a month of conflict, Russia has failed to take control of any of Ukraine’s major cities and has suffered heavy losses of men and equipment. The Russians may be about to conquer the strategic port of
Mariupol — but only by destroying it in the process.
The increasing brutality of Russian tactics, which is on full display in Mariupol, is a guide to the future. As they get more desperate, the Russians may become even more vicious. There are ominous indications that the Kremlin is considering the use of
chemical weapons already used in Syria.
But Kyiv has roughly six times the population of Mariupol. Surrounding Ukraine’s capital, bombarding it into submission and then successfully taking control of it looks beyond the capabilities of the Russian military. Even capturing Odesa, which would allow Russia to effectively control Ukraine’s coastline, could take months and involve the destruction of the port city that serves as the headquarters of the Ukrainian naval forces.
As well as causing terrible casualties, a prolonged war would steadily increase the risk of escalation. The pressure on western leaders to intervene would increase as atrocities get worse. The US and European governments are likely to continue resisting that pressure. But stepped-up military assistance to Ukraine may blur the line between intervention and non-intervention — raising the risk of a direct clash between Russia and the west.
The appalling losses for both sides, now and in the future, should increase the prospects for a negotiated peace. The Russians and Ukrainians have been talking almost from the beginning of the conflict. The Ukrainians seem to have accepted that they will not join Nato and will instead be a neutral state. That was one of Russia’s major demands and might allow Putin to claim some sort of victory.
There are other big issues that remain unresolved. The status of Russian-occupied Crimea and of Donetsk and Luhansk, which Russia now recognises as independent states, is not agreed. A peace settlement might have to involve some kind of creative compromise that accepts the current status quo, without setting it in stone.
Even if these issues were agreed, other very difficult issues would remain. Ukraine — understandably — now wants some kind of international security guarantees.
But if that looked like Nato membership by another name, it might not be accepted by Russia or, indeed, by Nato governments themselves. Russia may demand the lifting of western sanctions as a condition to withdraw its troops. But the US and EU will be reluctant to end Russia’s pariah status, as long as Putin remains in power.
The current assumption in Washington is that the Russians are probably not negotiating in good faith. Even the announcement of a ceasefire is likely to be treated sceptically — since Russia may just use it as an opportunity to regroup militarily.
But if Putin is indeed still committed to war, he may be making another catastrophic error. The pressure on the Russian economy and military is only going to increase in the coming months. Some military analysts believe the army may soon run short of ammunition and troops. There are shortages in the shops and prices are rising.
Displays of public dissent continue in Russia, despite the risk to protesters. Putin himself has taken to issuing angry
denunciations of traitors and fifth columnists. Some senior figures within the intelligence services have
reportedly been put under house arrest.
On the other hand, translating all this confusion and panic into an effective palace coup against Putin is a very tall order. The Russian leader is very careful about his security — so careful that he does not seem willing to allow even close aides near him.
Dissenting voices were purged from the Kremlin a long time ago. There will be disagreement and distress throughout the Russian system — but co-ordinating that into an effective plot to remove Putin may not be possible.
So those are the three options: a prolonged war; a peace settlement; or a coup in Russia. Expect the first, work for the second and hope for the third.
Introduction: Oil prices rise as EU mulls Russian ban, Saudi refinery hit
At the start of the new week, oil prices have risen, with Brent crude above $110 a barrel, as European Union nations consider joining the United States in a Russian oil embargo. Adding to market jitters, Houthi rebels attacked a Saudi Aramco refinery over the weekend, temporarily disrupting production.
Brent crude is up more than $3 at $111.03 a barrel while US light crude is trading at $107.88 a barrel.
Prices moved higher ahead of a series of summits this week between EU governments and US president Joe Biden, where the Europeans will consider whether to impose an oil embargo on
Russia.
The
Moscow stock exchange has been shuttered for three weeks following the imposition of western sanctions on Russia, but is
resuming limited trading today, in federal loan bonds.
European stock markets closed higher for the second week in a row last week despite there being little prospect of a ceasefire between Russia and
Ukraine.
Michael Hewson, chief market analyst at CMC Markets UK, said:
Volatility levels have slipped back quite considerably from the levels we saw in the immediate aftermath of Russia’s invasion of Ukraine, with stock markets on both sides of the Atlantic posting their best week since 2020.
There appears to be a growing disconnect between what markets are doing and what is happening on the ground in Ukraine and the increasingly brutal measures that Russian forces are taking in trying to wear down resistance to their occupation, including the use of hypersonic missiles.
While markets appear to be focussing on the fact that peace talks are taking place, there is also little evidence that they are actually leading anywhere, given the distance between the two sides in respect of what they will accept, with Ukrainian President Zelensky saying at the weekend that Ukraine wouldn’t give up Lugansk or Donetsk in the east of the country.
Joe Biden’s ambassador to the United Nations warned on Sunday there was
little immediate hope of a negotiated end to the war in Ukraine.
European markets look set to start the week lower, after a mixed Asian session where Japan’s Nikkei closed 0.65% higher, Hong Kong’s Hang Seng lost 1.1% and the Shanghai market was little changed.
