Yesterday finally we have received some good news from Russia - Ukraine border. Russia's Defence Minister has announced that some of the military exercises have been completed and those troops are returning to their bases. Just after this messages we have seen sharp declines in same heaven assets and sharp rises in indexes. NATO still didn't confirm these withdrawal as they want to see some progress. So why did that happen?
Let's start with the reason of this conflict. Ukraine is getting closer to Europe each passing day and especially in military form. That is disturbing Russia and Vladimir Putin wanted to show western countries some power and possible consequences of Ukraine's NATO membership.
And why did that last now? Because they have tested who will be with Ukraine and who will be with Russia. And also Russia wanted to see possible sanctions. Economic problems related to 2014 Cremia annexation are still causing discomfort for Russian government. The rate of USD/ RUB was around 30 before 2014 and after the annexation it has risen to 80. Average of recent 8 years is 65. So possible invasion of Ukraine would lead the currency to 100 in minutes. And Russia can't live with that not that long.
Each country has taken its lessons especially European Countries. They have seen their energy dependency on Russia one more time. US LNG producers have gained new costumers as well.
What is next?
As long as the troops stay in Russia -Ukraine border we will see volatility in the Markets and each news will affect commodities. So it is better to watch the market closely.
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