Investors are optimistic amid little progress in talks between Ukraine and Russia

The yield on 10-year Treasury bonds temporarily fell below the 2-year Treasury yield for the first time since 2019. Such an event is called a yield curve inversion. It’s should be noted that a yield curve inversion has preceded every recession in the past 40 years.

The US Federal Reserve is trying to weigh what strategy to choose to suppress inflation in a way that does not stop economic growth. Many analysts believe that it will be difficult to find a middle ground here, and the US Fed will have to sacrifice economic recovery to reduce inflation. This week’s employment data will also be taken into account by the Fed when deciding at the May meeting. Bank of America is forecasting three consecutive 50 basis point interest rate hikes.

Some progress was made during the talks in Istanbul between Ukraine and Russia. Ukraine is secured in a non-bloc and non-nuclear status without foreign military bases but with security guarantees from guarantor countries (UN Security Council+ states) under the principle of NATO Article 5. Among the guarantors are the countries of the UN Security Council, the United States, France, Turkey, Germany, Canada, Poland, and Israel. With such guarantees, which are equivalent to article 5 of NATO, Ukraine will also not join military-political alliances. But nothing should contradict Ukraine’s right to join the EU. The issue of Crimea is resolved non-military through a bilateral negotiation process, which is given 15 years. The issue of ORLO (LNR and DNR) is resolved separately at the level of the meeting of the presidents of Ukraine and Russia.

Russia is taking two steps to de-escalate the conflict in Ukraine. The Russian Ministry of Defense stated that Russia had decided to reduce hostilities in the Kyiv and Chernihiv directions. However, this does not mean a ceasefire. The General Staff of the Armed Forces of Ukraine believes that the withdrawal of Russian-fascist troops is probably a rotation of individual units and is intended to mislead the military leadership of the Armed Forces of Ukraine (AFU) and create a false image that the occupiers abandoned the plot to encircle the city of Kyiv. At the same time, British intelligence reports that having been convinced of the impossibility of encircling Kyiv, Russia decided to reduce its activity in this direction and transfer part of its forces to the Donetsk and Lugansk sectors of the front to get the South-East of Ukraine and create for itself a land corridor to the Crimea. At the same time, US sources indicate that Russia is not withdrawing troops, but is moving them around Kyiv.

Despite some negotiations, the shelling of Ukraine from the territory of Belarus has become more frequent. Almost all missile launches on Ukrainian territory yesterday were made from Belarus, from the areas of Mozyr and Khoiniki.

Every day Russia confirms that it is a terrorist state. By starting the war in Ukraine, Putin has already created a global food crisis. Deputy Secretary of State Wendy Sherman said Russia’s war in Ukraine has led to critical food shortages in Ukraine, and the effects of the “global food crisis” are being felt around the world.

Sherman also noted that Russia attacked at least three civilian ships carrying supplies from the Black Sea. The Russian Navy is blocking access to Ukrainian ports, depriving Ukraine of its ability to export grain and preventing 94 food ships from entering the Mediterranean Sea. It should also be noted that in Ukraine, the Russians are purposefully destroying food warehouses, thereby increasing the humanitarian catastrophe.

Asian markets closed higher yesterday. Japan’s Nikkei 225 (JP225) gained 1.10% yesterday, Hong Kong’s Hang Seng (HK50) added 1.12% and Australia’s S&P/ASX 200 (AU200) ended the day with +0.70%. Asian stock indices are also generally growing today. The exception is the Japanese market, where negative investor sentiment was caused by fears of a new outbreak of COVID-19 disease. Retail sales in Japan fell 0.8% in February from the same month a year earlier. The fall was recorded for the first time since last September.