Russia-Ukraine

Ukraine has continued to carry out operations in Russian territory over the weekend, in what marks one of the most significant developments in the conflict thus far.

Ukrainian forces are now understood to have advanced as far as 30km across the border with one senior official indicating that as many as 1000 troops have been involved in the operation.

Speaking to Agence France-Presse, the official said “We are on the offensive. The aim is to stretch the positions of the enemy, to inflict maximum losses and to destabilise the situation in Russia as they are unable to protect their own border”.

The latest developments will no doubt have a major impact on how the war is viewed in Russia, as the death toll continues to mount, and its people face the realities of Putin’s war being brought to their doorstep. While smaller scale incursions have been reported in Russian territory for some time, nothing compares to scale of the current operation.

The incursion has prompted Russian President Vladimir Putin to hold emergency meetings, as Russian forces strengthen defensive lines around the Kursk nuclear power plant (some 50km away from where Ukrainian forces are believed to be). With a state of emergency being declared across the Kursk region, Moscow have said that 76,000 people have been evacuated.

Many analysts and strategists have considered how Kyiv may be using the offensive to force Russia to redeploy some of its resources away from eastern Ukraine, while also taking out key supply depots.

As we looked at last week, Ukrainian forces are also understood to have entered the Russian town of Sudzha – which is home to an important gas-transit point. It is here that all remaining gas flowing through Ukraine from Russia passes though, with much of the gas eventually goes to other European markets.

Russian forces are believed to have started a fire at the Zaporizhzhia nuclear power station in southern Ukraine, with many speculating that the Kremlin is retaliating for Kyiv’s cross-border offensive.

With images showing smoke pluming from one of the furnaces, President Zelensky wrote that “Currently, radiation levels are within norm. However, as long as the Russian terrorists maintain control over the nuclear plant, the situation is not and cannot be normal”. Russia has however blamed Ukrainian forces for the fire.

Russian forces seized the facility in Zaporizhzhia early on in the war and have been using it as a means of blackmail against Kyiv. As of March 2022, the Russian state owned nuclear energy giant Rosatom have taken control over the plant, but its understood that power generation has remained relatively low since its occupation. While on Sunday, no nuclear activity was registered with its six nuclear reactors in ‘cold shutdown’ mode, the fire in the plant has greatly raised the risks of a nuclear meltdown.

The head of the IAEA released a statement saying “These reckless attacks endanger nuclear safety at the plant and increase the risk of a nuclear accident. They must stop now”.

Data-wise, this week gets off to a light start with attention being focused on the release of tomorrow’s UK employment data. With markets looking to gain further insight into the health of the labour market, economists are predicting average earnings excluding bonuses to ease substantially from 5.7% to 4.6%.