5 Top Stories on Putin’s War in Ukraine for Wednesday

A 12-hour cease-fire Wednesday has opened six evacuation corridors for Ukrainian citizens. In a tweet posted early Wednesday morning, Ukrainian officials said the cease-fire would be in force for 12 hours, from 9:00 a.m. to 9:00 p.m., and allow for the evacuations “following humanitarian corridors.”

The agreement does not allow Ukrainians to leave the country, however. About 5,000 residents of the northeastern Ukrainian city of Sumy have been evacuated to Poltava, a city in the center of the country.

Fitch Ratings cut Russia’s bond rating from B to C on Tuesday. That is a drop of six notches for the country’s sovereign bond rating. A B rating, on its own, is “highly speculative” and a C rating indicates that there is a significant risk of “imminent default.” The agency cited Russian President Vladimir Putin’s March 5 decree as having the potential to force “redenomination of foreign-currency sovereign debt payments into local currency for creditors in specified countries.” Fitch already had downgraded the ruble its default rating on the currency to B.

Fitch also noted the effect of sanctions on Russia’s ability to pay its debts:

More generally, the further ratcheting up of sanctions, and proposals that could limit trade in energy, increase the probability of a policy response by Russia that includes at least selective non-payment of its sovereign debt obligations.

To a lesser extent, the risk of imposition of technical barriers to servicing debt, including through the direct blocking of transfer of funds, or through clearing and settlement systems, have also risen somewhat since our last review.

Poland’s offer to transfer its fighter plane fleet to Germany for further transfer to Ukraine was called “untenable” by U.S. military officials. The Polish proposal was made without consulting the United States or NATO officials and drew this response from Pentagon spokesman John Kirby:

The prospect of fighter jets “at the disposal of the Government of the United States of America” departing from a U.S./NATO base in Germany to fly into airspace that is contested with Russia over Ukraine raises serious concerns for the entire NATO alliance. It is simply not clear to us that there is a substantive rationale for it.

NATO membership is off the table, according to Ukraine President Volodymyr Zelensky, who said in an interview that he has “cooled down” on the issue once he understood that “NATO is not prepared to accept Ukraine” for membership. NATO, he said, “is afraid of controversial things, and confrontation with Russia.” He also indicated a willingness to discuss the fate of the Donetsk and Lugansk regions, areas that Putin wants Ukraine to acknowledge as republics within the country.

Zelensky’s comments indicate that Ukraine may consider some form of Russian demands stated earlier this week that the country change its constitution to enshrine neutrality and recognize the Donetsk and Lugansk regions as independent, among other things.

Crude oil prices were slipping in early trading Wednesday morning. West Texas Intermediate (WTI) crude settled at $123.70 on Tuesday and opened higher Wednesday morning at $124.66. At last look, WTI traded down about 3.3% at $119.64. Ukrainian and Russian negotiators are meeting Thursday, and investors and traders appear hopeful for meaningful discussions that could lead to an end to Putin’s war. Alternatively, as Bloomberg headlines said Wednesday morning, “Putin’s Endgame Starts to Look Like Reducing Ukraine to Rubble.” That is the same “strategy” Russia used to destroy the Chechnyan city of Grozny in 1999.

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