[ANALYSIS] Russia announces partial mobilisation and threatens the West

Analysis details (09:05)

THE LATEST: Russian President Putin, in his televised speech to the nation this morning, announced that partial mobilisation will begin today (September 21st) whilst threatening the west with “All means of destruction, including nuclear ones”, and warned that this is not a bluff. The Russian Defence Minister Shoigu was interviewed in the minutes after Putin and suggested Russia is not fighting just against Ukraine, but NATO and the collective West.

ANNEXATION: The speeches by the Russian President and Defense Minister followed yesterday’s announcement that the Ukrainian regions of Luhansk (LPR), Donetsk (DPR), Kherson, and Zaporozhye (Zaporizhzhia) will conduct referendums to join Russia, with the polls to take place between September 23rd-27th. These regions account for around 15% of Ukrainian territory. The relevance of this is that Moscow will see fighting in these regions as attacks on “Russian territory”, and thus paves the way for a potential military escalation, and justifies the use of weapons of mass destruction, with nuclear weapons not ruled out. A poll cited by Russian news outlet Sputnik suggested that the “majority of people in DPR, LPR, Kherson and Zaporozhye regions would like to join Russia”.

THE DETAILS:

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  PARTIAL MOBILISATION: The Russian Defence Minister announced that only citizens who have passed basic military training will be called upon, and they will go through additional training – this represents 2.5mln people or around 1% of Russia’s reservist population, according to Shoigu, with 300,000 reservists to be called up. Shoigu also noted that all types and branches of the Russian Armed Forces, including the nuclear triad, are fulfilling the task set by the President. Adding that as part of the special military operation, large and difficult combat work is underway.


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  THREAT TO THE WEST: Putin claimed, “the West wants to destroy Russia”. Putin warned the West that Russia has lots of weapons to reply and is not bluffing – “All means of destruction, including nuclear ones, will be used in case of a threat to the territorial integrity of Russia, this is not a bluff” - a (translated) quote that received substantial attention. Putin noted that the West has crossed all limits in its aggression toward Russia.


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  REFERENDUMS: On the referendums, Putin said the aim is to liberate the Donbas regions and supports referendums in Russian-controlled parts of Ukraine and pledges to support these groups. “Russia will use all resources to defend its people”, Putin said.

REACTIONS: The West is yet to collectively reply to Putin’s speech, eyes are on whether the West is deterred by Putin’s mobilisation approach.

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  Ukraine: Ukraine's Head of the Presidential Administration Yermak, in response to Russian President Putin's announcement, said “we continue to operate”.


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  China: China's Foreign Ministry, on Putin's threat of nuclear warfare, said China calls on all parties to engage in dialogue and find ways to address security concerns


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  West: The West has largely not replied to Putin's speech yet. US Ambassador to the Ukraine says US will never recognise Russia's claim to purportedly annexed Ukrainian territory. UK Foreign Office Minister who said Putin's declaration is a worrying escalation, and that we should take his threats seriously.

MARKET REACTION: In the 30-minutes between Russian President Putin’s address and the commencement of the commentary from Defence Minister Shoigu a pronounced risk-off reaction has been seen alongside a substantial bid in the crude complex. A reaction that is seemingly driven by the (expected) announcement of a partial military mobilisation alongside Putin explicitly mentioning a nuclear response in the scenario of a threat to the territorial integrity of Russia. Stocks sold off (defence stocks caught a bid), haven bids were seen in the USD (EUR sold off), bonds, and spot gold, whilst oil futures also caught a bid on the escalating geopolitical tensions. 

21 Sep 2022 - 09:05- Research Sheet- Source: Newsquawk