Subsequent to the publication of this report, US President Biden stated that Ukraine's air defence system, in response to a Russian missile attack, was the cause of the explosion inside Polish territory. This reinforces the view laid out below that there are hints of an off-ramp in the Russia-Ukraine War.
A possible Russian missile explosion took place in Poland, a NATO member, very near the Ukraine border on 15 November.
At the time of writing, there has been no formal declaration of war on Poland by Russia, and, more importantly, no immediate effort by Poland to invoke NATO collective defence.
The US authorities have not rushed to officially confirm a Russian missile strike and, while arming Ukraine and corralling as many other countries as it can to impose wide-ranging sanctions, likely continues to avoid NATO direct intervention. In recent weeks, an off-ramp has begun to look as likely as further escalation, perhaps for the first time since the start of the war, in light of the:
Territorial setbacks for Russia, particularly the recent withdrawal from Kherson;
Ongoing external funding and armament of Ukraine;
Economic sanctions on Russia, particularly on its oil exports, taking full effect;
Potential challenges for President Putin from domestic dissenters;
Diplomatic softening of China's support for Russia (eg concerns voiced over nuclear weapons threat);
Signal from the trip of Chancellor Scholz that Germany wants to reinvigorate trade ties with China;
Biden-Xi meeting, where de-escalation in Ukraine appeared to be one area of common ground; and
Onset of the winter weather freeze in Ukraine.
Our top regional pick, should there be any de-escalation in the Russia-Ukraine War, is Hungary, which is the most reliant on imports of Russia gas (17% of total energy supply) and the cheapest relative to history (trailing PB at a 35% discount to the five-year median).