Ukraine was downgraded to default scores by both S&P Global Ratings and Fitch Ratings after the majority of the country’s bondholders agreed to defer debt payments for two years. Data on Friday showed Russia’s GDP shrank 4% in the second quarter, a decline that was less deep than feared.

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Russia is gearing up for a prolonged war in Ukraine, according to the think tank Institute for the Study of War. A new budget is reportedly on tap to boost spending by some $10 billion.

A senior US military official, speaking to reporters on condition of anonymity, said the US still doesn’t know what weapons were used in an attack Tuesday on a Russian airbase in Crimea. The official said surveillance aircraft and munitions were destroyed in the attack on the Saky base.

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

Key Developments

• Putin’s War Sends Russian Economy Back to 2018 in Single Quarter

• Ukraine Downgraded to Default by S&P, Fitch After Debt Delay

• Crimea Base Blast Deals Blow to Russia’s War Machine in Ukraine

• Russia Visa Ban in EU Wins Key Backing From Czech Presidency

• Turkey Boasts of Russia Trade Boom, Defying Push for Sanctions

On the Ground

Russia’s invasion of Ukraine is nearing the six-month mark, and its troops continue to concentrate on their bid to establish full control over Luhansk and Donetsk. Russian armed forces continued shelling in the vicinity of the strategic eastern cities of Slovyansk and Kramatorsk as well as other targets, the Ukrainian military said Saturday. Two civilians died and 13 others were wounded in a Russian strike in Kramatorsk, the governor of Donetsk, Pavlo Kyrylenko, said on Facebook. The UK said two primary road bridges that provide access to Russian occupied territory on the west bank of the Dnipro River in the Kherson region are probably unusable now.