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Wednesday, 16 March 2022

Optimism fades in Ukraine peace talks

Optimism fades in Ukraine peace talks: The latest news out of the ongoing peace talks between Russia and Ukraine isn’t quite as optimistic as it was a few days ago, with a senior Ukrainian aide saying yesterday that there are “fundamental contradictions” between the two sides. Writing on Twitter, presidential adviser Mykhailo Podolyak said that the ongoing talks are “very difficult,” while adding that there is “certainly room for compromise.”

The sentiment was echoed by Putin: Ukraine is “not showing a serious attitude toward finding mutually acceptable solutions,” Russian President Vladimir Putin told European Council President Charles Michel yesterday. Talks are nevertheless scheduled to continue today.

In what can only be called a baller move, European leaders traveled to Kyiv in show of support for Ukraine: The Prime Ministers of Poland, Slovenia and the Czech Republic arrived in the capital yesterday and met with Ukrainian President Volodymyr Zelensky to confirm the EU's unequivocal support for Ukraine, the Wall Street Journal reported.

Biden heading to Europe to meet with Nato allies: US President Joe Biden will travel to Brussels next week for an extraordinary Nato meeting, in his first trip to Europe since the war broke out. “We will address Russia's invasion of Ukraine, our strong support for Ukraine, and further strengthening NATO's deterrence & defense,” Nato Secretary-General Jens Stoltenberg wrote on Twitter.

China seeks to distance itself from Russia’s war after US warnings: “China is not a party to the crisis, nor does it want the sanctions to affect China,” Foreign Minister Wang Yi said in a phone call with his Spanish counterpart José Manuel Albares, according to a statement. His statement came a day after US officials voiced worries about Beijing’s close ties with Moscow, and warned China not to assist Russia’s military campaign. Hong-Kong listed Chinese stocks have plummeted in recent days on fears that Chinese companies will face western sanctions.


Russia could take years to recover from a default, with its current debt valuation near the levels of severely indebted countries like Venezuela and Argentina, the Wall Street Journal reports. The country’s government bonds have fallen below 10 cents on the USD since the US and EU battered its financial markets with sanctions, with uncertainty clouding a key interest payment on a USD-denominated bond expected today.

Today is key: Russia is due to make a USD 117 mn payment on two USD-denominated bonds today but has so far given mixed signals about whether it will pay in RUB. Ratings agencies say that the government will officially be in default if it opts to pay in RUB or fails to pay in USD during the 30-day grace period, though with most of its reserves frozen under the US’ sanctions regime, it remains unclear whether it is able to pay bondholders in USD.

The war won’t see European banks banned from dishing out to shareholders, as was the case during the pandemic, European regulators told the Financial Times. Dividend payouts and share buybacks were banned for almost a year as the pandemic plunged the global economy into recession, but regulators don’t appear as worried about the health of banks’ balance sheets during this latest crisis. European banks are expected to pay out EUR tens of bns in dividends and share buybacks this year.

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