Investment Conclusion
What’s set happening in Washington on August 18 can have consequences for markets. Zelensky plus the four PMs of Italy, UK, Germany and France, the President of the EU Commission and the President of Finland will meet with the US President and members of his Administration on Monday, August 18 to come up with a joint approach to Russia post the Alaskan Summit.
The European will come bearing plans (see below) to end hostilities in Ukraine.
The fact that meeting is taking place at all is something of an admission by the US authorities that no Ukrainian peace deal can happen without the Europeans and Ukrainians signing off on it.
On the issue of the provision of security for Ukraine, the US and EU ideas are also becoming more aligned (see below).
If the European plans are accepted, then the markets could have hope that the conflict could be halted. They would then be disappointed when Putin refuses to play along. But Putin would then find himself in the combined cross hairs of the US and the Europeans.
The goal of the European is get Putin into those crosshairs. The Eurpean leadership does not believe that Putin is remotely interested in peace.
Tomorrow’s meeting could conceivably result in a meltdown with the Europeans and Zelensky being blamed for not offering enough concession to bring peace. Then the markets could get worried that this failure could lead to an interruption of US support for Ukraine (and in consequence for NATO). At the moment I reiterate my recommendation to take no portfolio action yet. But things are getting more binary .