Yesterday, Brent moved down 4.4% to USD 55.3/bbl, but this had no impact on the performance of the Russian FX market. By the end of the day, RUB had firmed 2.6% against USD to 53.65, while trading activity surged, with the MICEX reporting USD 5.0bn turnover. Like the day before, RUB started with a bold move, reaching the 53.50 level early in the morning. We stick with our view that technical factors are currently playing the key role in the FX market as mainly international accounts cover their USDRUB longs opened weeks before around 60.0 levels.
Predicting to what point that activity could take the market would be walking on thin ice, given relatively low liquidity on the bid, since imports remain subdued, while the peak of external debt payments has passed in 1Q15. Meanwhile, the tax period kicks off next week, so exports might increase hard currency selling, which could provide additional support for RUB. The EM space traded in the black as well, with the EM FX index gaining 0.6%. Specifically, BRL rose 2.3% against USD, followed by ZAR and TRY, which firmed 0.8%. Commodity-based currencies also disregarded the decline in oil prices: NZD and AUD bounced 0.9%, while NOK gained 0.4%.