The former head of MI6 believes that the possibility of further escalation of the war is very small, and it is still the "main theme" to promote talks; Goldman Sachs strategists and commodity analysts believe that oil prices may be in the early stage of the "supercycle." stock market risk appetite is rising.

Source: Wall Street author:Gao Zhisou

On the evening of February 24th, Goldman Sachs invited Alexander Younger, former head of British military Intelligence 6 (MI6), together with Goldman Sachs Chief Strategic analyst Peter Oppenheimer and Goldman Sachs Chief Commodity analyst Jeff Currie, to make an in-depth interpretation of the current international situation, and made an analysis and prospect of the future international situation, asset prices and other trends.

MI6 expert: "drastic changes in Wudong", how will the situation be interpreted in the future?

First of all, Alexander Younger, the former head of British MI6 (MI6), made an in-depth interpretation of the current closely watched situation in Russia and Ukraine, and analyzed and predicted the trend of the international situation in the future.

(1) Western countries are not on the "United front", and the possibility of further escalation of the war is very small.

First of all, Alexander Younger believes that President Putin should now establish a policy towards Kiev while revising Ukraine's eastern border. At the same time, although he was somewhat unexpected about Putin's thunderbolt method of "cutting the mess quickly," saying that "what Putin is doing is something that no one has ever encountered before," he still believes that both Putin and the West. At present, we do not want the international situation to escalate further. He said:

"Putin doesn't play chess, but poker (which means Putin gambles), and he wants to watch the reaction of the West."

As for the next trend of the situation, Younger believes that Putin's "poker" mentality has led to a more "radical" approach than had been expected, and that breaking the current "rules" has touched NATO's "bottom line." however, the fight may still be in order to better return to the negotiating table, and the next step is to focus on the reactions and countermeasures of European countries.

In the short term, Younger believes that the Western world is bound to make Russia, which breaks the "rules", pay a price. However, before the establishment of the "new rules," it is actually very difficult to fight back effectively, because the interests and responsibilities of Western countries are not evenly distributed and do not stand on the "United front." Therefore, in the medium term, the most important thing for Western countries is to complete "internal coordination".

For example, the United States has criticized European countries for spending too little on military spending and other problems. (add: the US administration during the Trump era quarreled with Germany and other European countries over the issue of military spending. )

(2) how will NATO act?

With regard to this issue, Alexander Younger believes thatWhat NATO can do is Russia's energy exports to Germany and Russia's financing channels in the London financial market.

For Germany, which has a strong demand for energy, it requires a reconsideration of energy strategy and energy security, he added. In addition, Russia's nuclear threat also deserves the attention of European countries.

(3) is there any risk of escalation in the war situation and the international situation?

First, Mr Putin has succeeded in suppressing domestic opposition. , Alexander Younger said on the conference call that the operation allowed Putin to deal with officials who disagreed with him on the matter at home. Given that the current military operation is going well, there is little risk that President Putin will encounter public opinion at home unless there is a significant increase in deaths and injuries.

Therefore, the possibility of further escalation of the war is also very small, and Putin's motive is to use fighting to promote talks to redefine NATO's sphere of influence.

For the international situation, first of all, compared with 2014, Russia has completed more de-dollarization and more abundant foreign exchange reserves. Second, China and Russia can help each other in many areas, at least at the lowest level. These backgrounds provide Russia with more options.

Alexander Younger concluded that although the current "mouth-to-mouth quarrel" is relatively fierce, neither NATO nor Russia wants to "actually do it." Neither side wants the situation to escalate further, especially given that Ukraine itself does not belong to NATO.

Oil prices may be in the early stages of the "supercycle", the stock market risk appetite is rising

After Alexander Younger, the former head of MI6 (MI6), made an in-depth study of the international situation,Jeff Currie, head of commodities at Goldman Sachs, raised the oil price target to $125 and raised the price of natural gas on the grounds that the performance of oil prices implies many risk premiums such as uncertainty about the manner of sanctions.

At present, Brent crude oil and WTI crude oil both remain high above 90 US dollars.

He said that now the demand for natural gas is very large, the consumption rate is very fast, and the risk is quite high. At the same time, in retrospect, the only direct energy supply disruption in Russia and Western Europe occurred in 1941, when German troops invaded the Soviet Union. Such interruptions are historically "extremely rare" events, so there is considerable uncertainty.

Jeff Currie also said that halting the flow of energy and commodities was not in the interests of all parties, and that if it did happen, it would be "mutual destruction between Western Europe and Russia":

"Energy sales are vital to Russia's survival, while consumption of natural gas and oil is vital to daily life in Western Europe."

There are two areas where supply may increase in the future market: 1) Iran negotiations and 2) more SPR launches. In response, Jeff Currie believes that it is difficult for the two to replace Russian supply. He said on the conference call:

On Iran negotiations: oil prices are now nearly $15 higher than they were 10 days ago, putting Iran in a very different negotiating position than it was two weeks ago. In addition, Iranian and Russian crude oil exports are not on the same order of magnitude, and Russia is much larger.With regard to the release of SPR:, by the way, the United States Strategic Petroleum Reserve is limited and requires approval to release more than 50 million barrels of oil.

Jeff Currie concluded:

"our view has always been, and will continue to be, that Iran is a speed bump [of oil prices]. We still believe that we are in the early stages of the commodities supercycle, which is due to a lack of investor participation in this area, resulting in significant underinvestment. "

Subsequently, Peter Oppenheimer, chief strategist at Goldman Sachs, expressed his views on the current stock market, and he concluded:

"overall, we think the market has digested a lot of slower growth and fairly strong risk appetite is on the rise."