- Russia is attacking Ukraine on multiple fronts, including in Kyiv.
- A collapse of the Ukrainian government could allow Putin to order a retreat.
- The West's sanctions may keep oil prices bid, but markets could recover from the current downfall.
The Russian army is accelerating its offense in Ukraine – and undoubtedly moving faster than Western diplomats, scrambling to agree on sanctions. Markets have woken up to a dark day of war and have reacted rapidly. However, a quick end to major hostilities could trigger a relief rally. At least a partial one.
Reports from Kyiv show various plumes of smoke from inside and outside the city and Russian helicopters coming from Belarus. The conflict is far more than a "peacekeeping mission" in Ukraine's east.
Events are moving fast and there is massive disinformation at times of war. Ukraine declared martial law and seems determined to fight back and halt the advance of Russian troops – but it could be beyond them. Some 190,000 troops – some rebels and mostly Russians – are on the move, attacking Ukraine on various fronts.
Russian President Vladimir Putin's aim is to bring about the collapse of the government in Kyiv, which leans toward NATO and the EU. Overwhelmed by Russian firepower, cyberattacks, and propaganda, leaders in Ukraine could capitulate – at least to prevent further bloodshed.
If Putin manages to defenestrate the Ukrainian government and install his puppets, he could announce "Mission Accomplished" and move some of the troops back home. While a long-term insurgency would follow, the world could move away from focusing on the conflict. If sanctions remain tame and threats on NATO countries subside, there could be a relief rally.
Stocks and risk currencies would have room to rise, while gold – which has benefited from speculation and exuberance – would fall. The safe-haven yen, which is more sensitive to geopolitics than to other worries, would retreat.
Oil would depend on European sanctions – would the West disconnect from Russia? In that case, petrol prices would surge. However, if energy is excluded, there is room for a gradual decline.
