Update: SEIBERT SAYS HAS NO CONFIRMATION OF RUSSIA-UKRAINE CEASEFIRE... and drumroll:
- REUTERS WITNESS HEARS LOUD ARTILLERY EXPLOSIONS ON NORTHERN OUTSKIRTS OF EASTERN UKRAINIAN CITY OF DONETSK
So, time to buy more stawks.
* * *
The comedic value of developments out of Ukraine, especially when it comes to "de-escalation", truly has no equal. Case in point, events from the past three hours. The fun started just after 4 am eastern, when the first of many headlines hit as follows:
- POROSHENKO AGREES TO PERMANENT CEASE-FIRE IN UKRAINE WITH PUTIN
- POROSHENKO REACHED UNDERSTANDING ON STEPS FOR PEACE W/PUTIN
Bloomberg clarified by saying that Ukrainian President Petro Poroshenko comments were sourced on his website after phone call with his Russian counterpart Vladimir Putin over unrest in nation’s east. To be sure, risk loved this "news", which the algos decided this time would be different from all the other ceasefires. The reaction was swift:
- USD REVERSES LOSSES VS JPY AFTER UKRAINE CEASEFIRE AGREEMENT
- EUR RISES VS USD TO SESSION HIGH ON UKRAINE CEASEFIRE AGREEMENT
- BUND FUTURE DROPS TO DAY LOW AS UKRAINE CEASE-FIRE ANNOUNCED
- FORINT GAINS 0.4%/EUR ON UKRAINE CEASE-FIRE
- RUBLE RALLIES 1.43% VS USD, MOST SINCE JUNE 24 ON CEASEFIRE
- U.K. 10-YEAR GILTS EXTEND DROP; YIELD RISES 6 BPS TO 2.50%
- UKRAINE 2017 USD BOND YIELD FALLS 76BPS ON TRUCE
Further news and headlines seemed just as promising, although suddenly the word "conditions" emerged, signally not all may be well:
- DONETSK REBELS READY FOR POLITICAL SETTLEMENT WITH KIEV: IFX
- REBELS SAY SETTLEMENT CONDITIONAL ON UKRAINE HALTING FIRE: IFX
The WSJ triumphantly blasted:
Russia, Ukraine Agree to Cease-Fire
The presidents of Russia and Ukraine agreed on a permanent cease-fire in eastern Ukraine, the Ukrainian president's office said.
Russian President Vladimir Putin and Ukrainian President Petro Poroshenko also reached an understanding on steps to promote peace, the presidency said.
The Kremlin said the presidents exchanged opinions on what should be done to end the bloodshed as soon as possible.
And then things suddenly started to go sour, because this time again wasn't different after all:
- PUTIN DIDN'T AGREE ON CEASE-FIRE, RUSSIA NOT PARTY TO CONFLICT
- PUTIN, POROSHENKO DISCUSSED STEPS TO CEASE-FIRE: PESKOV
Instead, PUTIN BACKS IDEA OF IMMEDIATE CEASE-FIRE IN UKRAINE: PESKOV, something the Kremlin has been pushing all along.
Wait, so... no ceasefire? But, the algos... Oh crap, U-turn, U-turn now!
- EUROPEAN STOCKS, U.S. FUTURES PARE GAINS
- GERMAN 10-YEAR BUNDS PARE DROP ON RUSSIAN CEASE-FIRE COMMENTS
- JPY GAINS AS PUTIN SAYS RUSSIA NO PARTY TO CEASEFIRE AGREEMENT
Then, just as it was unclear if there is a deal or not, the president of Estonia decided now is the time to make some more demands on Russia:
- ILVES: RUSSIA MUST ADMIT THAT IT'S PARTY TO CONFLICT IN UKRAINE
- ILVES: RUSSIA MUST `TAKE GENUINE STEPS' TO EASE UKRAINE CRISIS
- ILVES SAYS EU, U.S. `READY TO TAKE MORE RESTRICTIVE MEASURES'
At this moment none other than Obama, fresh from his vacation and currently touring Europe, also chimed in:
- OBAMA SEES `CHANGED LANDSCAPE' IN NATO-RUSSIA RELATIONS
- OBAMA: NO UKRAINE SETTLEMENT POSSIBLE IF RUSSIA BACKING REBELS
- OBAMA: NATO SUMMIT TO PROJECT UNITY ACROSS ALLIANCE ON UKRAINE
- OBAMA SAYS `WHAT'S HAPPENED IN UKRAINE IS TRAGIC'
- OBAMA SAYS NATO `POISED' TO DO MORE TO AID UKRAINE
- OBAMA: ESTONIA `MODEL ALLY,' HELPS NATO AGAINST CYBER THREATS
- OBAMA SAYS `ESTONIA WILL NEVER STAND ALONE'
- OBAMA: ESTONIAN AIR BASE `IDEAL' TO HOST AIRCRAFT, PERSONNEL
Obama's punchline - order more US defense stuff:
- OBAMA URGES NATO MEMBERS TO REVIEW, UPDATE DEFENSE CAPABILITIES
But then things got really wierd, when the usual Poroshenko website revisionism hit in earnest:
- POROSHENKO CHANGES WEBSITE STATEMENT ON CEASE-FIRE IN UKRAINE
- KIEV STATEMENT NOW REFERS TO `CEASE-FIRE REGIME IN THE DONBAS'
- POROSHENKO SAYS AGREEMENT REACHED ON `CEASE-FIRE REGIME'
Said presidential website can be found here [12]. WSJ once again promptly chimed in to "explain" the muddied situation:
Kremlin Takes Issue With Term 'Cease-Fire' in Ukraine
The Ukrainian president's office said Petro Poroshenko and Russian President Vladimir Putin agreed to a cease-fire regime in eastern Ukraine. The Kremlin took issue with that wording, saying the two leaders only discussed steps toward peace.
It wasn't immediately clear whether the differences reflected diplomatic semantics--admitting that Mr. Putin had agreed to such a deal would contradict months of Kremlin assertions that they don't control the separatists in Ukraine--or a more fundamental disagreement. Neither side provided details of what was agreed to.
Ah yes, semantics. And then, to confirm that once again Ukraine did not even follow the CIA playbook, the counterparty to the "ceasefire" negotiations, apparently was never consulted to begin with!
- REBELS SAY POROSHENKO DIDN'T AGREE CEASE-FIRE WITH THEM: RIA
Finally, to celebrate the de-escalations:
- UKRAINE KILLED 100 REBELS NEAR SNIZHNE, LYSENKO SAYS
- BORDER GUARDS SEE INCREASED RUSSIAN TROOP ACTIVITY: LYSENKO
- LYSENKO SAYS INSURGENTS ARE DAMAGING LOCAL GAS PIPELINES
And just to make sure Putin is really pissed off:
- UKRAINE SEEKS STATUS OF SPECIAL U.S. ALLY: YATSENYUK
- YATSENYUK URGES PARLIAMENT TO ADOPT BILL ON UKRAINE'S NATO BID
- YATSENYUK: NEW DEFENSE DOCTRINE MUST DEFINE RUSSIA AS AGGRESSOR
- YATSENYUK SAYS WAR IN EAST ISN'T INTERNAL UKRAINIAN CONFLICT
- YATSENYUK SAYS RUSSIA INSTIGATED, CONTINUES CONFLICT IN UKRAINE
- YATSENYUK SAYS ENTIRE UKRAINIAN ECONOMY IS ON WAR FOOTING
- RUSSIA HAS DONE EVERYTHING TO DERAIL UKRAINE-EU DEAL: PREMIER
To summarize: despite pent up hopes for pent up "de-escalation" everything is again back on square one with the civil war raging as usual, but there were some more confused headlines, coupled with promises of a ceasefire that apparently does not exist. End result - the algos are happy because US equity futures just pushed to fresh all time highs. As for the people of Ukraine, oh well: who cares about them.