Ukraine Latest: US Agrees a Ukraine Rocket Probably Went Astray

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(Bloomberg) -- Poland’s head of state said there’s no indication that an explosion late Tuesday near the country’s border with Ukraine was an intentional attack by Russia, saying the incident was probably “an unfortunate accident” and a result of Ukrainian air-defense measures. The US said it agreed that was the likely cause.

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NATO Secretary General Jens Stoltenberg echoed the remarks from President Andrzej Duda, telling a news conference after chairing a meeting of the alliance in Brussels that there’s “no indication that Russia is preparing offensive military actions against NATO.” Preliminary analysis suggests that the explosion was likely caused by a Ukrainian rocket fired to repel Russian cruise-missile attacks, Stoltenberg said.

Ukrainian President Volodymyr Zelenskiy disputed that account, saying he believed the rocket that caused the explosion came from Russia, and calling for Kyiv to be involved in the investigation.

Key Developments

  • Poland Says Nothing Indicates Missile Hit Was Intentional Attack

  • Xi Looks Away From Putin Toward West in Return to World Stage

  • Milley Says Russia’s Losses Give Ukraine an Opening for Talks

  • US Cyber Review Punts on Russian Hack, Hinting at Limitations

  • Russia’s Economic Pain Won’t Peak Soon Amid Sanctions Slow Burn

  • Meet the Fertilizer Tycoon at Center of Kremlin Grain Talks

(See RSAN on the Bloomberg Terminal for the Russian Sanctions Dashboard.)

On the Ground

Russian forces conducted the largest set of missile strikes against Ukrainian critical infrastructure since the start of the war on Tuesday, according to the latest report from the Washington-based Institute for the Study of War. The Russian military likely used a substantial portion of its remaining high-precision weapon systems in the coordinated missile strikes, the ISW said. Zelenskiy said millions of consumers in 18 Ukrainian regions experienced planned or emergency power cuts after Tuesday’s strikes on the nation’s energy system.

(All times CET)

Ukraine Nuclear Plants Cut Off by Tuesday’s Attacks (10:31 p.m.)

The Khmelnytskyy nuclear power plant in western Ukraine was cut off from the electricity grid by the Russian missile attacks on Tuesday, forcing it to temporarily rely on diesel generators for back-up power, the International Atomic Energy Agency said in a statement. Back-up power was restored, but the two reactor units remained shut down.

The Rivne nuclear plant in northwest Ukraine lost the connection to one of its power lines after Tuesday’s attacks, reducing its power output, and one of its units was disconnected.

“Yesterday’s power loss clearly demonstrates that the nuclear safety and security situation in Ukraine can suddenly take a turn for the worse, increasing the risk of a nuclear emergency,” IAEA Director General Rafael Mariano Grossi said.

Zelenskiy Seeks World Bank Aid for Infrastructure Repairs (10:02 p.m.)

Zelinskiy said in his nightly address that he met with World Bank Vice President Anna Bjerde, asking for help funding billions of dollars of urgent repairs to his nation’s infrastructure.

Zelenskiy Says Ukraine Cooperates Fully on Poland Strike Probe (9:13 p.m.)

“The Ukrainian position is very clear: We seek to establish all details, every fact,” Zelenskiy said of the explosion that killed two people in Poland. “This is why we need that our experts join the international investigation so that we receive access to all data that our partners have and to the explosion site.”

He said in his nightly address that “all our information is completely accessible” and Ukraine gave it “to our partners starting from the night, from the first hours.”

US Senator Cardin Urges Giving Ukraine More Advanced Weapons (8:50 p.m.)

US Senator Ben Cardin, a senior member of the Foreign Relations Committee, said Ukraine needs more sophisticated weapons.

“Russia’s continuously changing their strategies,” Cardin, a Maryland Democrat, said on Bloomberg Television’s “Balance of Power.” “At one point, they tried to take over the country. Now it looks like they are trying to destroy the country.”

“Missile defense is perhaps the most important item for Ukraine to be able to defend themselves,” he said. “So we have to up their sophistication on being able to take out these missiles before they do their damage.”

Milley Says Russia’s Losses Give Ukraine an Opening for Talks (8:40 p.m.)

With Russian forces reeling after losing troops and weapons, the approaching winter might be a good time for Ukraine to consider negotiations, the top US general said, reaffirming a stance that had earlier drawn a mild rebuke from the White House.

“The Russian military is really hurting bad -- so you want to negotiate at a time when you’re at your strength and your opponent is at its weakest,” Mark Milley, chairman of the Joint Chiefs of Staff, said at a Pentagon briefing. “All I’m saying is there’s a possibility for it -- that’s all I’m saying.”

The general’s remarks echoed comments he made last week at the Economic Club of New York that a possible stalemate on the battlefield heading into the winter opened an opportunity for negotiations. White House officials then sought to walk that back, emphasizing that Zelenskiy, not the US, would decide when and if to negotiate with Russia over its invasion of his country. In his latest remarks, Milley acknowledged that the war is likely to go on.

US Concurs Ukraine Missile Probably Went Astray (6:33 p.m.)

“We have seen nothing that contradicts President Duda’s preliminary assessment that this explosion was most likely the result of a Ukrainian air defense missile that unfortunately landed in Poland,” the US National Security Council said in a statement on the incident in Poland.

“But whatever the final conclusions may be,” spokeswoman Adrienne Watson added in the statement, “it is clear that the party ultimately responsible for this tragic incident is Russia, which launched a barrage of missiles on Ukraine specifically intended to target civilian infrastructure. Ukraine had — and has — every right to defend itself.”

Zelenskiy Calls for Ukraine to Take Part in Blast Probe (5:53 p.m.)

Zelenskiy said he wanted Ukraine to take part in the investigation into the blast in Poland, arguing that his military reported that the missile that killed the two men across the border didn’t come from Kyiv’s troops.

“I believe it’s a Russian missile -- I believe so according to my trust in the report by the military,” Zelenskiy said, referring to a report which he received from his commanders.

He urged investigators to provide any evidence of the missile’s connection to Ukraine, even if it’s done via non-public channels. His statement contrasts from those of NATO country leaders who said it the blast was likely caused by an anti-aircraft weapon fired by Kyiv’s troops.

Russia Economy Shrinks for Second Quarter (5:43 p.m.)

Russia’s economy shrank for a second quarter as the shock of sanctions over the Kremlin’s invasion of Ukraine disrupted trade and upended domestic demand, with the worst of the downturn likely early next year.

Gross domestic product fell an annual 4% in the third quarter, in line with the central bank’s estimate but faring better than every forecast in a Bloomberg survey of analysts. It follows a drop of 4% in the prior three months, in what was Russia’s first GDP contraction in over a year.

Zloty Recovers as Traders Reminded of Looming Risks (3:42 p.m.)

The zloty bounced back from a three-week low after the missile blast was called a potential accident, not an international attack escalating the Russia-Ukraine war.

However, the incident reminded traders of the risks still weighing on the zloty -- the region’s most liquid currency -- after nearly nine months of conflict beyond the European Union’s eastern frontier. The zloty rose 0.7% to 4.70 per euro on Wednesday after an overnight slide past 4.78. It neared the level where it traded before news of the blast.

NATO Defends Anti-Air Systems Protecting Its Territory (1:36 p.m.)

NATO Secretary General Jens Stoltenberg defended the alliance’s air defense systems after what he said was an errant missile shot down by Ukrainian systems landed in Poland.

The alliance’s air defense systems are designed to prevent attacks, with different missiles having specific characteristics. The cruise missile that landed in Poland didn’t have those traits, he told reporters in Brussels.

“That explains why the reactions were as they were,” Stoltenberg said. “It doesn’t say anything about our ability to defend against deliberate attacks against NATO territory.”

Rocket Comments Chime With Biden’s (12:35 p.m.)

The comments from Duda and Stoltenberg appeared to confirm an earlier assessment from US President Joe Biden, who told allies at the G-20 that the explosion, which killed at least two people, was caused by Kyiv’s air defenses, according to two officials familiar with the matter.

Biden still said the strike was ultimately sparked by Tuesday’s Russian missile barrage on Ukraine. He delivered the assessment during a conversation with NATO and other allies, said the officials, who asked for anonymity to discuss sensitive matters.

Germany Offers to Intensify Air Patrols (11:45 a.m.)

A spokesman for the Defense Ministry in Berlin said Germany has offered to reinforce air-policing patrols over Poland starting already on Thursday if requested by the government in Warsaw.

Defense Minister Christine Lambrecht will discuss the offer with her Polish counterpart later on Wednesday, the spokesman said at a regular news conference. The patrols can be conducted from German bases, he added.

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