Your Friday Briefing: Ukraine Launches a Southern Counteroffensive

We’re covering a Ukrainian counteroffensive and an effort by Europe’s central bank to tamp down inflation.

Ukraine launches a counteroffensive in the south

Ukrainian officials said their forces used long-range missiles and artillery to attack more than 200 Russian targets in the south on Thursday. The strikes destroyed six ammunition depots, the military said.

The effort — boosted significantly by a flow of powerful Western weapons — has put pressure on Moscow’s military infrastructure and supply lines in and around Kherson Province, which Russian forces seized in March. The gathering scale of Ukraine’s attacks in the south is consistent with preparations for a ground offensive.

Ukraine’s military success comes as it is again trying to make its case to the world that it can defeat the Russians. Officials are pointing to successes such as a recent Ukrainian artillery attack on a bridge critical for Russian supplies.

But despite the Ukrainians’ renewed optimism, military analysts and Western officials said it was far too soon to forecast a reversal of fortunes, and that a long slog seems more likely.

While he is fully vaccinated and twice boosted, the positive test raises health concerns for the 79-year-old president. He is receiving Paxlovid, an antiviral drug used to minimize the severity of Covid-19, and will isolate at the White House. Biden will “continue to carry out all of his duties fully during that time,” his press secretary said.

Biden’s positive test also underscores how Covid remains a persistent threat in the U.S., even as much of the country tries to move past the pandemic. Fueled by the BA.5 subvariant, cases and hospitalizations have surged.

More virus news:

The increase — by a bigger-than-expected half a percentage point — was an abrupt end to eight years of negative interest rates aimed at getting banks to lend generously, although the increase leaves the bank’s key rate at zero percent. European stocks ended the day roughly where they started, after investors reacted positively to the E.C.B.’s aggressive action to tame inflation.

In countries that use the euro, inflation is soaring at its fastest rate in generations, reaching 8.6 percent in June. The hike was driven largely by rising energy and food prices. The E.C.B. has a particularly tricky task: balancing the economic weaknesses and debt burdens of 19 different countries.

Recession concerns: Wall Street’s most talked about recession indicator, the yield curve, is sounding its loudest alarm in two decades. An inversion of it has preceded every U.S. recession for the past half century, and it’s happening now.

What’s next: The E.C.B. introduced a new tool — the Transmission Protection Instrument — to keep bond markets in check. It doesn’t want to use it.

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