Tim Ash comments on report EU to extend Russian sanctions through March 2016

2015/9/1 23:28:19

UBO comment: This news, if confirmed and carried out as anticipated we consider as welcome as the flowers in May. We had become convinced that the main enforcers of the Minsk agreement, Germany’s Merkel and France’s Hollande were going to continue pressure on Ukraine for Minsk-2 compliance while allowing Russia to continue ignoring its responsibilities. We believe this message will be read by those around the Kremlin cabal that the time may have come for regime change – and not a minute too soon.

 


LONDON, Sep 1, 2015 (UBO) – Responding to a Wall Street Journal report that the EU will extend sanctions on Russia until at least the end of March 2016, Nomura International’s top emerging market economist Timothy Ash offered the following comments at 19:51 today:

 

Extend existing set, not deepen (yet).

 

I guess not unexpected – given limited evidence of progress on the ground and still range of tensions with the West (e.g imprisonment of Estonian security official). The message from the US/EU will be that Russia has a responsibility to do more to ensure an easing of tensions on the ground and compliance with Minsk II – there has been a step up in military activity over the past month or so (albeit ebbing a bit in recent days again).

 

Merkel et al, have talked about a willingness to ease sanctions - but I think that is only where there is real sign of an easing of tensions/compliance with Minsk II.

 

Default setting for the market is Russian sanctions stay as is - barring significant changes on the ground, one way, or the other.

 

My sense still is that we are at 3/10 in terms of sanctions on Russia, if Iran style sanctions are 9-10/10.

 

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NOTE: The comments by Timothy Ash in the article above have been issued by the Sales/Trading departments of Nomura International plc ("NIplc") and are made available to you by NIplc and/or its affiliates (collectively, "Nomura"), in order to promote investment services and is provided without compensation. This is not investment research within the meaning of applicable regulatory rules in the European Economic Area, nor is it research under the rules of the U.S. Self-Regulatory Organizations of which Nomura is a member or under applicable rules in Hong Kong. Information contained herein is provided for informational purposes only.

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