FX.co ★ Ukrainian-Russian conflict, day 72. The calm before the storm.

The key indices of the US stock market - Dow Jones, NASDAQ, and S&P 500 - ended Thursday with a powerful fall and were again near their local lows. From our point of view, such a move is logical, since the Fed announced a 0.5% rate hike a day earlier, and Jerome Powell said that the rate could be raised by another 1% during June and July. From our point of view, this is a very "hawkish" approach, and it is even more aggressive than originally planned since earlier everyone discussed two rate increases in a row by 0.5%. Also this summer, the Fed will begin to reduce its balance sheet, which is a quantitative tightening program. Therefore, the growth of stock indices on Wednesday evening was very strange to observe. Nevertheless, during this period, the US currency was falling, which is also absolutely illogical, but the next day it strengthened quite strongly against the euro and the pound. So in the end, everything fell into place.

The military conflict in Ukraine persists, but fierce fighting continues on literally several points, and not along the entire front. From time to time, missile strikes are carried out on Ukrainian cities, which are aimed at critical infrastructures, such as oil depots or railway stations. Thus, it is still not necessary to talk about the completion or preservation of the conflict. In general, it seems that we are now at a certain point of calm before the storm. Moscow has not achieved any of its goals in Ukraine, so it is unlikely that the "special operation" will end there, and Russian troops will leave the territory of a neighboring country. Ukraine is being filled with Western weapons and, according to the statements of official Kyiv, will launch a counteroffensive in the near future. These actions may provoke the Kremlin to new, more massive attacks. Rumors have been circulating for several weeks that a full or partial mobilization will be carried out in the Russian Federation. There is no official information about this. There are also rumors that Russia is going to officially annex the DPR and the LPR. In Kherson, the creation of the HNR is expected. As we can see, the conflict is following a path where peace negotiations are practically excluded. Kyiv has repeatedly stated that any attempt to hold a referendum in the Kherson region and peace talks will never happen. Advisor to the President of Ukraine Alexey Arestovich said that "we should prepare for a long war." All this will aggravate the situation with food and energy resources around the world. Even if Fed Chairman Jerome Powell has already openly stated that the conflict in Ukraine poses serious risks to the global economy, then this is not a joke. It should be remembered that Russia is one of the largest suppliers of oil and gas in the world, and Ukraine is food. Natural gas continues to rise in price, and oil is just very high.