Ukraine Ready For “Diplomatic Solution” But Won’t Trade “Single Inch” Of Territories

(Update 9:10am ET): In what may be a repeat of yesterday's "buy the Ukraine ceasefire speculation, sell the lack of follow through", moments ago futures spiked to session highs when Ukraine president Zelensky's deputy chief of staff Igor Zhovkva echoed what the president told ABC in the Monday night interview, saying that Ukraine is ready for a diplomatic solution and will discuss neutrality, but need a security guarantee…

• *AIDE TO ZELENSKIY SAYS UKRAINE READY FOR DIPLOMATIC SOLUTION
• *UKRAINIAN AIDE: CAN DISCUSS NEUTRALITY, NEED SECURITY GUARANTEE

But just as quick as the initial euphoria arrived, it fizzled after a Bloomberg headline indicated that Ukraine isn't willing to go with two of Putin's three demands, namely relinquishing Crimea and accepting Donetsk and Lugansk as independent republics:

• *UKRAINE'S ZHOVKVA: WON'T TRADE `SINGLE INCH' OF TERRITORIES

So on net, looks like another non-starter, but at least some negotiating back and forth, now that Ukraine's core demand for membership in NATO appears to no longer be on the table.

* * *

Earlier:

Here is a summary of the relentless firehose of all Ukraine war news to hit in the past few hours, courtesy of Newsquawk.

Discussions/Negotitations:

• Russian Foreign Minister Lavrov will travel to Turkey today to meet with the Ukrainian Foreign Minister, according to Ria citing the Russian Foreign Ministry.
• Russian Foreign Ministry says aims of its operation do not include the overthrowing of the Ukraine government.
• Russia says "some progress" has been made in discussions with Ukraine, according to AFP.
• Russia's Kremlin says Russia has made no decision on nationalizing foreign assets; interested in continuing talks with Ukraine. On possible compromise with Ukraine: Crimea is Russian region, must be recognised as such and Donetsk/ Luhansk are sovereign republics, must be recognised as such.
• Ukraine Foreign Minister Kuleba says he has limited expectations from discussions with Russian Foreign

  Minister Lavrov.

Energy/Economic Updates

• US House is planning to vote on the Russian oil ban today, according to Bloomberg's Wasson.
• President Vladimir Putin signed an order restricting trade in unspecified goods and raw materials.
• US State Department Envoy Hochstein said about 3mln bbls of oil is now stranded because there is such outrage in Europe regarding what is happening in Ukraine, while Hochstein added the US is in a dramatically different place than Europe as it imports less oil from Russia.
• Saudi and Emirati leaders declined calls with US President Biden during the Ukraine crisis, according to WSJ.
• British Energy Minister Hands said Russian sanctions are beginning to bite and that they are ready to work internationally on reducing dependence on Russian gas, while he added the country is in a good position on natgas supply but vulnerable on the price side.
• Russia’s ruble was quoted lower versus the dollar in the offshore market before foreign-exchange trading resumes in Moscow after an extended break.
• EU Commission President von der Leyen says they have purchases so much LNG that it will be independent of Russian gas until end-winter.
• Dutch PM Rutte, when asked about a potential joint EU fund to respond to the war, says the existing instruments should be used to the max first.
• Russian Foreign Ministry says their reaction to Western sanctions will be sensitive and precise, working on measures in all directions, via Reuters citing Ria.
• Ukraine state power grid operator says Russian forces have disconnected Chernobyl nuclear power plants from grid; Ukrainian Energy Minister says we do not know what is happening at Chernobyl nuclear plant, via Reuters.
• CBR said clients with foreign currency accounts can withdraw a maximum of USD 10k and withdrawals above this must be taken in RUB with the rule will stay in place until September 9th.
• Fitch downgraded Russia from B to C due to its view that a sovereign default is imminent.
• MSCI announced to discontinue MSCI Russia IMI Select GDR Index.
• Wheat futures slumped by almost 5% as traders assessed the global supply outlook with war ravaging one of the world’s top grain-growing regions.

Third Party Remarks

• US President Biden tweeted that "This much is already clear: Ukraine will never be a victory for Putin. Putin may be able to take a city — but he will never be able to hold the country".
• UK Transport Secretary Shapps tweeted they have made it a 'criminal offence' for any Russian aircraft to enter UK airspace.
• A source close to the Iranian negotiating team in Vienna told Iran’s state media on Wednesday that a “good” deal was on the table, but that the delay in the political decision making in Washington is hindering the process, according to Rudaw News.

Defense/Military

• Russian forces intensified their bombardment of Ukraine’s capital Kyiv, the U.S. said. That’s even as Moscow announced a pause in fighting for Wednesday to open humanitarian corridors from cities including Kyiv, Chernihiv, Kharkiv, Sumy and Mariupol, according to Interfax.  

Other

• Iranian Chief Nuclear Negotiator/Deputy Foreign Minister Kani has arrived in Vienna, according to journalist

  Aslani.