Monday came and went uneventfully for market volatility in what is becoming another huge win for Trump.
Let me de-compact some of the key macromarket factors at work here.
First, and few people would have predicted this not so long ago Trump has not only not shattered the European–US alliance but strengthened it in ways not imaginable under the earlier international organization approach. NATO spending will be 5 per cent of EU gdp, the tariff regime now being resolved favorably has actually cemented the two trading blocs connections and will no doubt lead to even more integration as many powerhouse EU companies expand not just their sales but actual real production in America, and a very high level of mutual coordination will be required for the proposed security guarantees.
Second, after yesterdays meeting it has become clear that these article 5 like guarantees supposedly agreed in principle to by Putin where the EU counties and US (at least in the skies) would militarily promise to backup Ukraine in NATO like fashion but without NATO ramifications, has been the key game changer.`What Ukraine has always hoped for and wanted, assuring its survival as a nation, is found in these guarantees.
Third, Putin will it has become clear at least by Trump will, if peace is achieved, be partially brought back into the community of nations. Both Putin and Zelensky will be able to declare some of their key war aims achieved, and the military industrial complexes of both countries will get a permanent Korean like DMZ that will continue to need to be defended far into the foreseeable future. Even the quite left wing Nobel prize committee will have to give Trump that honor which at this point he certainly has earned by any usual standards.
Fourth, and this clearly is the key sticking point Putin’s demand for the Donbas will have to be resolved. This remains the one key area that could derail the peace talks. Putin wants Ukraine to give up heavily fortified positions in Donetsk. If there were no article 5 protections that would make no sense whatsoever strategically. Those positions are exactly why the Russians have hitherto not seized more Ukrainian territory and they stand between Ukraine and any Russian effort to seize the entire country. Will Zelensky be able to sell such a relinquishment to his own military leadership?. Will Putin forego this key demand he has made? Will current 50 per cent tariffs on India for buying Russian oil and the prospects of even greater sanctions on China for doing the same convince him to mover forward on the agreement short of his maximal position? Can Zelensky and Putin make a deal with one another after a war that has cost the two countries combined perhaps a million lives? The next two weeks should give answers to these key questions and however this goes it will be very important for the world and also international markets.
Disclaimer– the information discussed is simply one person’s opinion nothing more or less. It is only for entertainment purposes. By using this blog you assume all risks associated with using this advice, suggestions, information, conclusions and everything else contained here-in and that you completely and fully understand that you and you alone are 100 per cent responsible for anything that occurs from using this information and material in anyway whatsoever–regardless of how you interpret any discussion, conclusions or advice contained here-in. Any discussion of actual stocks or investments is in no way a recommendation and is only for educational purposes. You should listen to many competing opinions, consider all the counterfactuals to what is argued, seek out always if necessary professional advice, and of course ultimately make your own decisions about the m