Stocks have staged a remarkable surge as the market's attention turns to a report from AFP which quotes President Volodymyr Zelensky saying "he is no longer pressing for NATO membership for Ukraine, a delicate issue that was one of Russia's stated reasons for invading its pro-Western neighbor."
The AFP also noted that "in another apparent nod aimed at placating Moscow, Zelensky said he is open to "compromise" on the status of two breakaway pro-Russian territories that President Vladimir Putin recognized as independent just before unleashing the invasion on February 24.
"I have cooled down regarding this question a long time ago after we understood that ... NATO is not prepared to accept Ukraine," Zelensky said in an interview aired Monday night on ABC News.
"The alliance is afraid of controversial things, and confrontation with Russia," the president added.
Referring to NATO membership, Zelensky said through an interpreter that he does not want to be president of a "country which is begging something on its knees."
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When ABC asked him about this Russian demand, Zelensky said he was open to dialogue. "I'm talking about security guarantees," he said.
He said these two regions "have not been recognized by anyone but Russia, these pseudo republics. But we can discuss and find the compromise on how these territories will live on."
"What is important to me is how the people in those territories are going to live who want to be part of Ukraine, who in Ukraine will say that they want to have them in," Zelensky said.
"So the question is more difficult than simply acknowledging them," the president said.
"This is another ultimatum and we are not prepared for ultimatums. What needs to be done is for President Putin to start talking, start the dialogue instead of living in the informational bubble without oxygen."
With the "news" spreading across markets like widlfire that Zelensky is ready to make a major concession, futures predictably exploded higher...
... while commodities tumbled.
The only problem is that none of this is actually news, and the report of the ABC interview actually hit 14 hours ago...
... and we led in our Ukraine update post all morning. In it we said that:
"in fresh remarks given to ABC News, President Zelensky hinted that Kiev could be willing to compromise on some of these proposals.
He said: ""Regarding NATO, I have cooled down regarding this question a long time ago, after we understood that NATO is not prepared to accept Ukraine. The alliance is afraid of controversial things and confrontation with Russia. We never wanted to be a country that is begging for something on its knees, and we are not going to be that country and I don’t want to be that president."
Essentially exactly what the AFP published in a fresh wrapper, which the market took as a major development but in reality was a report that had hit overnight and virtually nobody (aside from this website apparently and Nomura) noticed.
Already we are seeing some signs of reversal of the early euphoria, although now that a massive short squeeze has been triggered in stocks, it is possible that the upward momentum will stick even as algos realize they are rampaging higher on old news.
On the other hand, perhaps Zelensky finally got the tap on the shoulder and was instructed to give Putin this much-needed offramp which will then serve as the basis for China-mediated negotiations between the two countries that eventually results in a Ukraine making a constitutional amendment that voids NATO pursuit and gives Putin control over Crimea while institutionalizing the Donbas republics as standalone entities, precisely what Putin has been asking for all along...