On Friday, RUB kicked off a bit stronger, touching the 56.8 level against USD in the morning amid oil’s timid attempts to recover. However, in the afternoon crude gave up climbing higher, with Brent slipping to USD 56.3/bbl (-0.2%) by the close. USDRUB immediately reacted to oil’s correction, going back to the 57.00 level and marking there for the rest of the session. Hence, RUB closed at 56.95 against USD, flat to the previous day levels. Trading activity was subdued, with MICEX turnover amounting to only USD 2.7bn.
The EM FX universe traded mixed, though the EM FX index declined 0.3% on Friday, dragged down by BRL (-1.0%), MXN (-0.6%) and ILS (-0.7%). At the same time, ZAR kept on leading, adding 0.2%, followed by TRY, which bounced 0.1%.
This week, export selling flows are likely to intensify, providing support to RUB and counterbalancing oil’s jittery dynamics. However, as concerns the medium-term horizon, we still tend to think that fundamental factors (dividends, external redemptions) would skew the balance on the markets towards long USDRUB positions.