The relevance to investors is this. US objectives diverge inceasingly from those of the Ukrainans and Europeans. The US seeks to conclude a ceasefire and peace deal in one swoop which concedes Ukrainian territory to Russia as part of the deal. Then the US wishes to move on to lifting sanctions and doing business and specifies this as part of its proposals. No such carrots are on offer in the European and Ukrainian proposal which is limited to an immediate casefire proposal with territory and lifting sanctions (most unlikely) only up for discussion once it is concluded.
I believe this puts Ukraine and Europe on a collision course. The US can only sign a "withdrawal" deal on its own if Ukraine and Europe refuse to sign the proposed US ceasefire or peace deal. The US has been acting as if Ukraine and Europe are too weak to bother including in negotiations. In fact Ukraine & Europe have the power of veto over any deal. That is the sort of binary ultimatum (sign or don't sign) which will escalate the trans-atlantic divorce.
That is exactly what the Europeans (particularly the UK) have been trying to avoid. To continue with this charade, the Europeans would have to abandon Ukraine. I doubt that even European pragmatism (cowardice) can go so far.
As tensions mount between the US and Europeans there will be spillovers from the Russia/Ukraine silo to trade, security (NATO) and diplomacy. That cannot leave markets indifferent.
Recommendation: stay underweight or short risk assets despite the current relieff rally. Own safe haven assets like the Yen and Gold.
Joint Ukrainian - European Cease Fire Proposal.
* Both sides immediately enter into negotiations on technical implementation with the participation of the US and European countries. This is in parallel to preparation of the agenda and modalities for a full peace deal.
OFFICIAL-SENSITIVE
Russia-Ukraine Deal Framework Ceasefire:
Both sides commit to a full and unconditional ceasefire in the sky, on land and at sea.
* Both sides immediately enter into negotiations on technical implementation with the participation of the US and European countries. This is in parallel to preparation of the agenda and modalities for a full peace deal.
* Ceasefire monitoring, led by the US and supported by third countries.
* Russia must unconditionally return all deported and illegally displaced Ukrainian children. Exchange of all prisoners of war (the principle of "all for all"). Russia must release all civilian prisoners.
Security guarantees for Ukraine:
Security guarantees for Ukraine:
Ukraine receives robust security guarantees includingfrom the US (Article 5-like agreement), while there is noconsensus among Allies on NATO membership.
* No restrictions on the Ukrainian Defense Forces.
* The guarantor states will be an ad hoc group of European countries and willing non-European countries. No restrictions on the presence, weapons and operations of friendly foreign forces on the territory of Ukraine.
* Ukraine pursues accession to the EU.
Territory:
* Territorial issues will be discussed and resolved after a full and unconditional ceasefire.
* Territorial negotiations start from the basis of the line of control.
* Ukraine regains control of the Zaporizhzhia NuclearPower Plant with US involvement, and also the Kakhovka Dam
* Ukraine enjoys unhindered passages on the Dnieper River and control of the Kinburn Spit.
Economics:
* US and Ukraine implement economic cooperation/minerals agreement.
* Ukraine will be fully reconstructed and compensated financially, including through Russian sovereign assets that will remain frozen until Russia compensates damage to Ukraine.
* US sanctions imposed on Russia since 2014 may be subject to gradual easing after a sustainable peace is achieved and subject to resumption in the event of a breach of the peaceagreement (snapback).
END.