Ukraine Update: Russian Offensive Starts; Polish Leader to Lviv

Russia’s military pressed on with its offensive in southern and eastern Ukraine, with President Volodymyr Zelenskiy saying Moscow had launched a new campaign focused on conquering the Donbas region. 

U.S. President Joe Biden will hold a call with key allies Tuesday to discuss Ukraine. The meeting comes amid efforts to coordinate supplies of heavy weapons to Kyiv to counter the Russian push, while European governments tentatively begin reopening their diplomatic missions in the country.

Polish Prime Minister Mateusz Morawiecki visited Lviv on Tuesday, one day after a deadly Russian rocket strike.  

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Russia Rolls With Economic Punches as Shock Wears Off (1:35 p.m.)

Russia’s economic crisis has lost some of its sting, buying more time for President Vladimir Putin at home as his military presses a new offensive in its war against Ukraine.

Even with a recession looming and inflation approaching 20%, the economy has for the moment defied the most dire forecasts. JPMorgan Chase & Co.’s economists have seen enough upbeat signs to halve their forecast for a first-quarter contraction in gross domestic product to 5%.

The bleakest scenario hasn’t materialized in large part because Russia contained the spread of financial contagion with stiff capital controls while plentiful petrodollars helped the ruble recoup losses and put a leash on inflation. 

Ukraine Update: Russian Offensive Starts; Polish Leader to Lviv

EU Eyes June for Preliminary Opinion on Ukraine Candidacy (1:19 p.m.)

The European Union is seeking to provide in June its opinion on Ukraine’s bid to become a candidate to join the bloc, paving the way for a possible decision by leaders at a June 23-24 summit, according to people familiar with the matter.

The move could complicate efforts to reach a diplomatic solution since Russia has frequently cited Kyiv’s decision to forge closer ties with the EU and the North Atlantic Treaty Organization as a rationale for its invasion of Ukraine.

Polish Prime Minister Visits Lviv (1:17 p.m.)

Polish Prime Minister Morawiecki visited Lviv on Tuesday, the first foreign leader to go to the city in western Ukraine after it was hit by a deadly missile strike.

Morawiecki opened a facility for internally displaced people, he wrote on his Twitter account. 

Seven people were killed in the missile strike on the city on Monday, Lviv Mayor Andriy Sadovyi said previously.

U.K. Cabinet Briefed on Russian Troops Deployment (1:00 p.m.)

The U.K. Cabinet was briefed Tuesday that Russia’s fresh deployment of troops is being conducted in a “piecemeal fashion,” suggesting Putin’s commanders have not learnt the lessons so-far of the conflict in northern Ukraine, Prime Minister Boris Johnson’s spokesman said.

Spokesman Max Blain told reporters in London that Johnson’s Cabinet had heard from a senior security official, whom Blain declined to name. The official said Russia would exploit its “troop number advantage” but that is unlikely to be “decisive” in the Donbas region. The official also reported “poor Russian morale” with “claims of some soldiers and even units refusing to fight.”

G-20 Finance Chiefs to Single Out Russia for Growth Fallout (1:00 p.m.)

The meeting of Group of 20 finance chiefs this week will include Russian representatives and is intended to send a clear message that the Kremlin is fully responsible for the global economic consequences of its war on Ukraine, a German government official said.

An agreement has emerged that Russia shouldn’t be able to dictate the G-20 format or the agenda of the upcoming meeting of finance ministers and central bank governors, the German official said, speaking on condition of anonymity. 

The U.S. has backed away from a suggestion that its officials would boycott G-20 meetings if Russian counterparts attend. 

Halliburton Writes Off All Ukrainian Assets Amid War (12:52 p.m.)

Halliburton Co. wrote off all of its Ukrainian assets seven weeks into Russia’s invasion in a year when the world’s biggest fracker is forecast to reap the largest profit increase in more than half a decade.

The company took a pre-tax charge of $22 million for its Ukrainian exposure, which included $16 million in receivables, according to a statement Tuesday. Halliburton was the first major oilfield-services contractor to announce plans to halt work in Russia in response to Putin’s invasion. 

Russian Equities Fall for Second Day (12:35 p.m.)

The benchmark MOEX Index declined for a second day, as Russia’s military pressed on with its offensive in southern and eastern Ukraine. 

The index fell as as much as 3.2%, led by Lukoil, Sberbank and Gazprom, adding to declines of 3.4% on Monday.

Henkel to Exit Russia (12:31 p.m.)

German chemicals maker Henkel AG will exit its business activities in Russia, joining a parade of companies leaving the country over the invasion of Ukraine. 

Its 2,500 employees in Russia will continue to be employed and paid, Henkel said in a statement, adding that the financial impact is not clear yet. 

Spanish Premier to Visit Zelenskiy in Kyiv (11:30 a.m.)

Spanish Prime Minister Pedro Sanchez will meet Zelenskiy in Kyiv “in the coming days,” El Pais newspaper and public broadcaster TVE reported, citing unidentified sources in Sanchez’s office.

Sanchez announced Monday that Spain would follow European partners like France and Italy and reopen its embassy in the Ukrainian capital. 

U.S. Provided Most Ukraine Support (11:05 a.m.)

The U.S. has provided the equivalent of 7.6 billion euros ($8.2 billion) to Ukraine since the Russian invasion, making it the country’s biggest supporter, according to the Kiel Institute for the World Economy’s Ukraine Support Tracker. 

Ukraine Update: Russian Offensive Starts; Polish Leader to Lviv

European Union members offered a total 2.9 billion euros, plus 1.4 billion euros from EU institutions and 2 billion euros from the European Investment Bank.

The data cover the period Feb. 24 through March 27 and include financial, military and humanitarian support. 

Greece Seizes Russian Tanker (11:03 a.m.)

Greece has seized a Russian tanker off the island of Evoia as it seeks to enforce European sanctions against Russia, a shipping ministry official said requesting anonymity as the situation is ongoing. The tanker’s name is Pegas and it carries a Russian flag. 

The seizure is related to the ship and not its load and Greece will follow all the procedures expected under European sanctions, the person said.

Bank of Russia to Sue Over Reserves (10:10 a.m.)

The Bank of Russia will challenge in court U.S. and European sanctions freezing its reserves, Governor Elvira Nabiullina said Tuesday, according to Interfax.

Calling the restrictions “unprecedented,” she didn’t specify where or when the suits might be filed. The measures have cut off access to about half of Russia’s $600 billion in foreign exchange and gold holdings.

Finance Minister Anton Siluanov has also threatened to sue over the limits, which he blames for preventing Russia from servicing its Eurobonds, raising fears of default.

Stellantis Suspends Production in Russia (9:36 a.m.)

Netherlands-based carmaker Stellantis has suspended manufacturing operations at its factory in Kaluga, near Moscow, “to ensure full compliance with all cross sanctions and to protect its employees.”

Stellantis had said the factory, which makes 11,000 commercial vans a year, was operating at a low level and said may have to shut because of logistical and supply problems. The maker of brands including Jeep, Peugeot and Fiat had already halted exports and imports to and from Russia last month.

Putin to Meet Big Business Wednesday (9:28 a.m.)

Putin will meet executives and owners of Russian big business on Wednesday, according to people familiar with the plans. No agenda has been announced, they said.

Putin told top officials on Monday that the West’s “economic blitzkrieg” didn’t work, while over the weekend he signed off on legal amendments that require Russian companies to delist their overseas shares.

The change could force tycoons including Russia’s richest man, Vladimir Potanin, as well as steel billionaires Vladimir Lisin and Alexey Mordashov, to reconfigure the ownership structure of businesses they hold in part via overseas shares paying foreign-currency dividends.

Ukraine’s Kuleba in Bulgaria (8:48 a.m.)

Ukraine’s Foreign Minister Dmytro Kuleba arrived in Bulgaria Tuesday as part of an effort to secure peace, he said on Twitter. 

European Gas Falls to Lowest Since Invasion (8:42 a.m.)

European natural gas extended its decline to the lowest level since the start of Russia’s war in Ukraine, amid warmer weather and signs from the Kremlin that payment for the fuel in rubles isn’t expected until next month.

Benchmark Dutch gas futures fell as much as 12% to 84 euros per megawatt hour, the lowest level since Feb. 23 — the day before Russia’s invasion of its neighbor. The front-month contract slipped for a second consecutive session, after settling 9.2% lower on April 14, ahead of the Easter holidays in Europe. 

Biden to Host Ukraine Call (8:38 a.m.)

President Joe Biden will host a call this afternoon with the leaders of France, Germany, Italy, Japan, Canada, Poland, Romania, the U.K., the European Union, and NATO, according to Justin Trudeau’s agenda.

The leaders will discuss the war in Ukraine, the agenda says. The U.S. and its allies have been working to coordinate heavy weapons supplies to Ukraine as it prepares for a Russian offensive in the east of the country.

Donbas Shelling Halts Evacuations for Third Day (8:30 a.m.)

No humanitarian corridors will open for the third consecutive day on Tuesday because of intensive shelling in Dobas, Deputy Prime Minister Iryna Vereshchuk said.

Russia refused to allow safe passage for civilians fleeing the port of Mariupol via Berdyansk. “Difficult negotiations” under way to secure evacuation routes in the Kherson and Kharkiv regions, Vereshchuk said.

Ukraine Update: Russian Offensive Starts; Polish Leader to Lviv

France’s Le Maire Urges Russia Oil Embargo (8:29 a.m.) 

France is pushing for a European embargo on Russian oil imports despite hesitation from some countries, Finance Minister Bruno Le Maire said, denying reports that French officials are stalling until after the final round of presidential elections on Sunday.

Speaking on French radio Europe 1, Le Maire said Russia’s assault on the Donbas could convince some governments that the move was more necessary now “than ever.”

“If we haven’t got there today it isn’t because France doesn’t want to, it’s because certain European partners are still hesitating,” he said, adding that it may take a “few weeks” to get achieve consensus. 

France has been pushing publicly for sanctions on Russian oil for but has faced resistance from some European nations, including Germany, worried about the impact on domestic economies.

Ukraine Update: Russian Offensive Starts; Polish Leader to Lviv

Russian Strikes Target Ukraine’s South and East (7:53 a.m)

Russia’s navy has moved almost 200 km (125 miles) away from Ukraine shores, according to the Ukrainian military. That’s after the recent sinking of its flagship Black Fleet missile cruiser Moskva. Russian ships are still impeding Ukrainian navigation, it said.

At the same time, Russian troops are enforcing air defenses near Kharkiv in the northeast, while local officials said there were explosions overnight in the Dnipro region in central Ukraine and Mykolayiv in the south. 

The mayor of the Russian-occupied southern city of Kherson, Ihor Kolykhayev, wrote to Ukrainian leaders asking for guidance on how to operate, Ukrainska Pravda reported. “Ukraine’s government bodies have stopped functioning in Kherson,” Kolykhayev said in the letter, the outlet reported.

Zelenskiy Says Russia Starts Donbas Assault (11:10 p.m.)

“It can now be stated that Russian troops have begun the battle for Donbas, for which they have been preparing for a long time,” Zelenskiy said in his nightly video address Monday. “In the east and south of our country, the occupiers are recently trying to attack in a little more thought-out manner than before.” 

Russian forces were already shelling the area heavily. Russia has been assembling large numbers of troops in eastern Ukraine for weeks even as it pulled out of areas near Kyiv. Moscow has not announced the start of a major offensive.

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