It feels like a significant escalation.
Does the US and the US actually, and President Biden
gave the blessing to of Vladimir Zelensky to use these
very big missiles a couple of days ago.
Does that come with a guarantee that if Russia escalates,
the US is there to protect them?
Well, I think that this is a slew of questions
that we do not yet have the answers to, Francine.
And just to recap, some of the news that we
just got in the last few minutes, because this all
feels fairly significant, is what we got from Vladimir Putin
was signing into a decree allowing Russia to fire nuclear
weapons in response to any kind of massive, massive conventional
attack on its soil.
That would include drones.
That would include presumably long range missiles.
That Russia would view aggression against itself or its allies
by non nuclear state backed by other nuclear powers as
a joint attack.
Summary.
Basically saying that if there was an attack on Russia
by a member of a coalition, that will be seen
as an attack by sort of the full coalition.
IE even if it's a non nuclear power aided by
a nuclear power, that would be seen as a joint
attack.
This is something that Putin has been talking about signing
into as a decree since September.
This is officially happening now.
And it comes obviously, Francine, just on the heels of
that sort of news that we got from Joe Biden,
basically permitting the Ukrainians to begin using some of these
attack EMS within Russian territory in the Kursk region.
Not sort of all across Russia, but within that region.
They have a a range of about 300 kilometers.
And this is coming at a time right now when
we understand again from Ukrainian news agencies that those first
missiles have been deployed.
So what we are getting this morning in the last
few minutes is Putin on the one hand signing a
decree that says that any sort of coalition strike that
is backed by a nuclear power, even if it's by
Ukraine, non nuclear striking within Russia could see a nuclear
response.
Again, that is why there is seen a huge move
into the haven essence over the last few minutes.
You can see it on this sort of German, German
bonds have been being being bought up.
You see the euro moving, you see gold moving, you
see everything moving because there's a lot of uncertainty as
to what this means.
Again, when we think about the possible red lines in
Ukraine's and when when they are drawn, this sort of
goes back to what we've been hearing from Olaf Schultz,
who has been much more reticent for one to support
any of these strikes within Russia, presumably to try to
avoid a situation that could escalate severely.
But Ali on these attack comes, I mean, again, as
you said, they're American made Army tactical missile systems.
There's these supersonic guided missiles.
Will we know what they've hit this morning and what
this means in terms of escalation or as a market,
just as you know, before they find out, they just
want to get out of risky assets.
I think that that's what you have to assume that
people want to get out of risky assets.
When you hear sort of Russian nuclear response in the
same breath as a strike, you know, within Russia by
some of these US made weapons, that you're going to
get a lot of fear within the market, right?
And this is exactly the kind of thing that Olaf
Schultz has been talking about at the G20 when he
was asked basically, will you follow Joe Biden?
Will you begin to deliver your own long range missiles,
a torus system that has an even further range than
these US attack comes?
Will you be able to deliver those?
Will you begin to deliver those to Ukraine?
He said no, absolutely not.
My position is unchanged.
And that comes after he is really the only G7
leader to have had any contact with Vladimir Putin.
They just had a call this Friday and basically saying
that Putin had not really changed his position on anything.
And he's of course, also, you know, fighting his own
election within Germany, where some of the Germans are really
very concerned about possible escalation.
And many of the voters here, particularly on the far
right and the far left, which are doing very, very
well here, want to see less involvement in Ukraine, not
more involvement.
So this is a story that obviously has huge ripple
effects within domestic politics across Europe.
But as you can see this morning across the the
the markets with getting us catching a bid here from
the German bonds and across really the whole sort of
haven complex right now.