EU’s Borrell Declares Putin “Failed” In Belief That “He Was Going To Conquer Ukraine”

Update(12:45ET): European Union foreign policy chief Josep Borrell issued a provocative statement aimed at Moscow and Putin personally on Thursday. Borrell declared that Vladimir Putin invaded Ukraine starting on Feb.24 with the belief that he was quickly going to conquer Ukraine, but that “he failed”. Borrell stated of Putin: he “believed he was going to conquer Ukraine” but “he failed.” 

The EU top diplomat continued: 

“He believed he was going to divide us; he failed. He believed that he was going to weaken the transatlantic relationship and he failed. Now he has to stop,” he added while speaking to reporters while entering a summit of EU leaders in France’s Versailles.  

Borrell also addressed the necessity of Europe winding down its energy dependence on Russia, saying, “we will be much safer. Have to spend less gas, use less gas, the climate requires that. For once, geopolitics and climate go together.” 

UAV footage showing Ukrainian attacks on a Russian armored column in Brovary, including that captured T-72A tank. According to the audio, the regimental commander was killed. It appears it was a mix of Ukrainian artillery and tank strikes on the column.https://t.co/LemIgjQiOZ pic.twitter.com/x2tVSHPENa

— Rob Lee (@RALee85) March 10, 2022

European Commission head Ursula von der Leyen had a similar message at the summit in Versailles, saying, “we will rethink European defense with strong capabilities. We will rethink energy. We have to get rid of the dependence of Russian fossil fuels and for that we need massive investment in renewables.”

During the fourth round of Ukraine-Russia talks, Kiev is reported to have offered “neutrality” on the NATO question, but it went nowhere:

Thursday’s high-level talks in Turkey between Ukrainian and Russian foreign affairs counterparts ended in no progress for a potential cease-fire or for protecting civilians in the heavily bombarded Mariupol, even after Ukraine suggested a “neutrality” proposal with security guarantees from world powers. 

In the most senior interaction since Russian President Vladimir Putin launched the invasion of Ukraine on Feb. 24, the failed talks between Ukraine Foreign Minister Dmytro Kuleba and his counterpart, Russia’s Foreign Minister Sergey Lavrov, lasted just 90 minutes in the Turkish coastal city of Antalya. 

Russia reportedly rejected Ukraine’s “neutrality” proposals that promised international security guarantees, according to the Financial Times. The two sides discussed a 24-hour cease-fire but did not make progress, as Russia was still seeking “surrender from Ukraine,” Kuleba said. 

The European Union is imposing additional sanctions that would target 160 Russian leaders and prominent figures — including oligarchs.

The new sanctions extending to Belarus, which include reduced access to the SWIFT banking system. @NBCNews

— Kyle Griffin (@kylegriffin1) March 10, 2022

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With newsflow out of Ukraine having become a firehose, with market moving headlines firing every minute, traders can be forgiven if they have just given up following the narrative. To help out, here is a snapshot of all the latest market-moving news out of Ukraine from the last few hours:

Ceasefire Negotiations:

• Ukraine and Russia failed to make progress in halting the war at the first high-level talks between their foreign ministers since the Russian invasion began.

• Ukrainian Foreign Minister Kuleba says no progress on ceasefire; Russia stuck to its script; holding the meeting with his Russian counterpart was not easy; ready to meet again in this format; ready to continue engagement to stop the war. Mariupol was the most difficult situation, Lavrov did not commit to a humanitarian corridor in Mariupol. Have two tasks now: organizing humanitarian corridor from Mariupol and reaching 24-hour truce.

• “The broad narrative he conveyed to me is that they will continue their aggression until Ukraine meets their demands, and the least of these demands is surrender,” Kuleba said.

• Hosted by Turkish Foreign Minister Mevlut Cavusoglu in the Mediterranean resort city of Antalya, this was the most senior in-person meeting between Ukraine and Russia since the Russian invasion began Feb. 24.

• The main sticking point, from a Ukrainian perspective at least, appears to be the humanitarian corridors as Kuleba noted that there was no progress on a ceasefire and the city of Mariupol was the most difficult situation. During the presser, the Mariupol, Ukraine City Council says the city is under attack from the air; residential buildings have been hit and the Deputy Ukrainian PM added that a humanitarian corridor attempting to reach the city had to turn around given the fighting.

• Russia is open to serious talks between the two presidents “but those contacts must have added value,” Lavrov told reporters after the meeting. He reiterated that Russia is seeking the demilitarization of Ukraine.

• “We want a Ukraine that’s friendly and demilitarized, a Ukraine in which there isn’t a risk of the creation of another Nazi state, a Ukraine where there won’t be a ban on the Russian language, on Russian culture,” Lavrov said.

• German Chancellor Olaf Scholz and French President Emmanuel Macron spoke to Putin by phone Thursday and reiterated their demand for an immediate cease-fire. The three leaders agreed to stay in close touch in coming days, according to a statement from Scholz’s office.

• In terms of the market reaction, Kuleba began speaking first and his remarks that there was no ceasefire progress and seemingly intimating that a Presidential-level meeting was not due imminently sparked some pressure in the equity space, hampering the ES March’22 contract by around 15-points, geopolitical-premia lent some support to WTI and Brent as well, moving to fresh incremental highs. However, the most significant move was in Spot Gold, which tested USD 2k/oz to the upside (high USD 2000.03/oz), gaining around USD 20/oz amid the commentary from the ministers.

• Looking ahead, look for updates on Kuleba’s focus points of a humanitarian corridor from Mariupol and attaining a 24-hour truce. Additionally, for any indications towards, as suggested by Ukraine, another Foreign Ministers meeting and/or a gathering between the respective Presidents. Note, the situation at the Chernobyl nuclear plant has not developed following the power outage reported earlier in the week, during the Foreign Ministers press conference the Ukrainian Energy Minister confirmed the ongoing lack of power.

Other Discussions/Negotiations:

• Russian Foreign Minister Lavrov says a possible meeting between the Ukrainian and Russian presidents was discussed; but need more preparations, Reminded Ukraine that Russia had presented its proposals and Moscow wants a reply. Prepared to discuss security guarantees for Ukraine. Possible meeting between the Ukrainian and Russian presidents was discussed; but need more preparations. No one here today was discussing a ceasefire; on oil/gas sanctions, says never used oil and gas like weapons.

• Reminder, prior to the Foreign Ministers meeting the Russian Kremlin said the Turkey meeting could open the way for talks between Russian President Putin and Ukrainian President Zelensky, awaiting the outcome of today’s Foreign Minister talks.

• Ukrainian President Volodymyr Zelenskiy has said he’s willing to consider some compromises on Russia’s demand that his country abandons ambitions to join the North Atlantic Treaty Organization and adopt a neutral position.

• Zelenskiy’s also said that “only after the direct talks between the two presidents can we end this war,” and that there’s been no direct contact between him and Putin.

• EU is to back Ukraine’s European bid although fast membership is unlikely, according to Sputnik citing reports.

Energy/Economic Updates

• UK PM Johnson told Ukrainian President Zelensky that he is committed to further tightening sanctions to impose maximum economic costs on Russia, according to a Downing Street spokesperson.

• Russian Finance Ministry said domestic banks would be allowed to lend to companies controlled by non- residents and the move will allow firms wishing to continue doing business in Russia to work as usual.

• Morningstar Indexes determined it is necessary to reclassify Russia from emerging market to unclassified and will remove all Russian securities from the Morningstar fixed income indexes as of March 31st.

• Ukraine gas transmission network operator says that Russian forces have taken control of gas compressor stations, which threatens transit to Europe.

• European Union has reached the limit of its capabilities when it comes to financial sanctions against Russia, according to NEXTA citing Head of EU diplomacy Borrell, via NEXTA

Defence/Military

• White House said Russia’s claims of alleged US biological weapons labs and chemical weapons development in Ukraine are false and that the US should be on the lookout for Russia to possibly use chemical or biological weapons in Ukraine in light of its false claims.

• US Secretary of State Blinken discussed with Ukrainian Foreign Minister Kuleba additional security and humanitarian assistance for Ukraine and discussed Russian attacks on population centres US Defense Secretary Austin spoke with Ukrainian counterpart about continued provision of defensive assistance for Ukraine.

• Spain is ready to send a new batch of weapons to Ukraine, according to reports in Sputnik citing the Defence Minister

Third Party Remarks

• Pimco risks losing billions in the event of a default by Russia with the fund manager exposed to a derivative bet of at least USD 1.1bln and holds USD 1.5bln of sovereign bonds, according to FT.

Other

• White House said the US is continuing to engage with Iran deal partners including Russia, while it believes US and Russia share an objective on the Iran nuclear deal.

• Iran’s Secretary of the Supreme National Security Council of Iran Shamkhani said nuclear talks have become more complicated every hour and that the US’s desire for a quick agreement indicates it has no will for a strong nuclear deal.

• Iranian Supreme Leader says Iran will not bow to pressure to reduce defensive power, regional presence and progress in nuclear technology.