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RUB: rebound on CBR's FX interventions

On Friday, the CBR presumably intervened twice in the FX market: early in the morning and around 18.00. The official numbers are to be published tomorrow but, judging by the spikes in trade volumes, we think that it was regulator. Overall, total turnover in USDRUB on Friday was near USD 5.2bn. Thus, in the morning the CBR's interventions brought USDRUB from 54.20 to 53.00. Later it picked up back to the 54.00 level, at which the CBR pushed the button once again. Hence, in the end USDRUB closed at 52.90, so the RUB appreciated almost 3.0% on the day vs. USD. Meanwhile, the EM FX index closed 0.9% in the red with ZAR, TRY and MXN weakening 1.2-1.4%. Friday's US jobs report was rather solid, with wage inflation picking up and hours worked at a cyclical high. Nonfarm payrolls gained 321k in November, much stronger than expected and the biggest gain since June 2012. Net revisions were up 44k for the last two months. The unemployment rate was unchanged at 5.8%. However, the key aspect was a 0.4% MoM gain in average earnings, the biggest monthly increase since June 2013. In light of this, EM risk saw pressure, while the 10-year UST yield inched up to 2.31% (+7bp). Separately, we higlight that Brent slipped 1.1% to USD 68.22/bbl on Friday. This week, the CBR's monetary policy meeting on Thursday is to be in focus (see separate story below).
Maxim Korovin, Tatyana Zueva
VTB Capital analyst


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