Over the last 24 hours, the biggest news story was President Vladimir Putin’s decree imposing a broad ban on food imports (see separate story). Otherwise, we flag the phone conversation between President Putin and German Chancellor Angela Merkel, which came shortly after the announcement of the ban. According to the official press statement (in English here) the sides reiterated their earlier views on the “development of the acute crisis situation in Ukraine.” Otherwise, the headlines which rippled most prominently through the financial markets were related to alarmist remarks by Polish Prime Minister Donald Tusk about the risk of a “new stage of the crisis” in light of the strengthened deployment of Russian troops at the Ukrainian border. The comments were later echoed by US Secretary of Defence Chuck Hagel, speaking in Stuttgart. Elsewhere, Dutch Prime Minister Mark Rutter said that the forensic mission at the MH17 crash side had been suspended for the time being due to danger to the personnel. Also, Canada added 19 individuals and 22 entities to its sanctions list (all of these were already earlier included on US and/or EU lists).
All of these headlines point towards a further escalation in the stand-off over the situation in Ukraine and it is hard to flag any event which might be a tangible turning point. The earliest item in sight is the 31 October deadline for the review of the EU sectoral sanctions.
Alexei Zabotkin, Vladimir Kolychev
VTB Capital analyst
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