FX.co ★ Tensions between Russia and Ukraine ease

The Dow Jones, NASDAQ Composite, and S&P 500 indices closed in the black yesterday after the news that Russia was pulling back some of its forces near the Ukrainian border to their bases. The market reaction was rather muted. However, the stock market managed to regain momentum, closing the day with a rise. Despite some improvements, the conflict is still not over. More than 100,000 Russian soldiers and military equipment are located near the Ukrainian borders, surrounding the country on all sides, including the Belarusian border. Notably, yesterday, neither the media nor Ukrainian intelligence confirmed that Moscow had really begun to withdraw its units. Hence, this news may turn out to be fake or part of a political game that Moscow is playing against Europe and the US. However, the forecasts of the Western media, which predicted that Russia could invade Ukraine on February 15-16, did not come true. This is why they are less trustworthy when it comes to the Ukrainian-Russian conflict.

At the same time, Joe Biden made an emergency speech last night. He noted that the US and European leaders allowed the annexation of Crimea in 2014. However, this time, if Russia invades a neighboring country, sanctions will be very tough. The United States and EU countries will help Ukraine financially and provide military supplies. Biden also said that the current crisis should be resolved diplomatically to avoid military conflict. He also stressed that the US is not the enemy of Russia. However, should the conflict escalate further, Washington will make Russia pay a 'high price' for Ukraine's invasion.

Yesterday, German Chancellor Olaf Stolz and Russian President Vladimir Putin held a conversation. Stolz and Putin failed to make any progress in the negotiations. Vladimir Putin noted that Russia needs assurances that Kyiv will not join the NATO military alliance in the near future. Olaf Stolz replied that Ukraine's NATO membership is not on the alliance's agenda at the moment. Putin also demanded to stop NATO expansion, not deploying offensive weapons near Russia's borders. Nevertheless, tensions have subdued. The war has not begun yet and perhaps it will never start. The US stock market rose following such news. However, it is likely to slide into corrections in 2022.

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