Russia, Ukraine conflict crosses old boundaries
Roughly five weeks ago, Ukraine forces crossed the border into Russia’s Kursk region in a surprise move escalating a two-and-a-half-year conflict by stepping over a line that had not been crossed to that point.
This week Russia was accused of striking a civilian grain vessel carrying Ukrainian grain to Egypt through Black Sea waters near NATO member Romania, damaging the vessel with no reported casualties. This move represents another line being crossed in what was described by Ukraine’s foreign minister as, “A brazen attack on freedom of navigation and global food security.”
Following these events it has been reported that a White House summit took place Friday with Britain and U.S. leaders meeting to discuss plans that could include allowing Ukrainian forces to strike targets inside Russia with Western-supplied missiles. Russian President Vladimir Putin warned Thursday evening he would regard such an agreement as tantamount to NATO directly entering the war.
“This will mean that NATO countries, the United States and European countries are fighting Russia,” he said.
It seems there has been an extra vibration in several markets as these events have played out. Wheat futures have rallied 12% in price since the end of August. Stock indices have moved 8 to 10% in both directions since early August. Gold futures hit new all-time highs this week, while crude oil futures dropped under $66 per barrel for the first time since May 2023 before bouncing off the lows mid-week and look to close positive on the week.
These price movements could be explained by a myriad of other factors outside of the conflict and that’s been the case for the past year with the shock and worry of the initial conflict wearing off and the unfortunate normalcy of it setting in. These new escalations however could press the matter forward enough to begin new speculation of how and when the conflict will end. While the current conflict is not a surprise the end of it, good or bad, is bound to catch a few market participants off guard.
Information contained herein is believed to be reliable but cannot be guaranteed as to its accuracy or completeness. Past performance is no guarantee of future results or profitability. Futures and options trading involve substantial risk of loss and is not suitable for all investors. All information, including this specific material, used and distributed by Pinion Futures LLC (PF) shall be construed as a solicitation for entering into a derivatives transaction. PF does not distribute research reports, employ research analysts, or maintain a research department as defined in CFTC Regulation 1.71.