A new phase in the Ukrainian war

Five weeks into this conflict, we are entering a new activity regime.

Probably needless to say, this strike was very elegantly calculated to test and potentially trigger the Russian response required by their military doctrine, “escalate to de-escalate”.

With the exception of Turkey and Israel, public efforts to mediate the conflict and stop the armed engagement do not appear on the daily agenda of any other international player.

Washington and its allies practice a foreign policy of “cheap grace.” They feel good about themselves as they urge Ukraine to fight Russia to the last Ukrainian. (antiwar.com)

Oil price volatility was a good predictor of this. The next phase appears to be mostly firefighting the energy prices in Europe and possibly inflation getting out of control. Followed by food shortages and quick realignment of second-tier countries to one block or the other. After the Indian response and Russians mentioning the BRIC countries earlier this week, I expect the rest of South America (except Mexico), African countries and a few in EMEA (Serbia, Egypt, Iraq) to produce at least a few surprises.

The transition from risk off to risk on and back took about a month. The next inflexion could come as early as next week and the transition might last less than half the previous time. By the end of April we might squeeze in a whole new cycle, just before we go into the May lull/pullback. This is the timeline around which I am planning my own trades - you might want to do your research and produce your own view.