Export selling flows, coupled with the continuing upturn in oil prices, left RUB no choice but to strengthen yesterday. In early trade, RUB rose 1.4% to 51.50 amid a decent export offer, then lingered there for a while. In the evening, the baton of market support passed from exporters to oil, so RUB advanced further, ending the day at 50.81 (+2.7%). In the meantime, Brent climbed 3.4% to USD 62.6/bbl, flirting with USD 63.0/bbl during the session. Trading activity on the Russian FX market was more intense yesterday, with the MICEX posting USD 4.4bn of turnover. However, we highlight that export selling flow would likely abate today as MET and VAT are due on Monday next week.
RUB remained the brightest spot in the EM universe yesterday. The average EM FX index closed 0.4% stronger, supported by BRL (+1.4%) as well as MXN and ZAR, which firmed 0.6%. Asian currencies were trading in the red, with IDR and KRW correcting down 0.5% and 0.2%. In commodity-based currencies, there was no single direction: NZD dropped 1.0% against USD but NOK recovered 1.0% and AUD rose 0.3%.