Following Black Monday, it was Turnaround Tuesday, aided by a belated cut in interest rates and reserve requirements from the PBOC. A 7.6% drop in the Shanghai Composite index presumably provided the reason for the move. The response from the PBOC was enough to lift market sentiment, resulting in an increase in oil prices, the US dollar and some EM equity markets, with the Russian market being among them.
Already in the morning, USDRUB moved below the 70.00 level and it continued to slide for the rest of the session. Trading activity remained high, with MICEX turnover totalling USD 7.2bn, and it seems that exporters were still on the market, preparing for CIT payments due on Friday. From the opening, Brent found firmer ground, climbing to USD 44.5/bbl in the middle of the day. RUB welcomed the move, firming to 68.12 against USD, but oil failed to consolidate there, stepping back to USD 43.2/bbl by the end of the session. As a result, RUB also moved away from intraday highs and closed at 69.02, gaining 2.7% over the day.
The EM FX space also felt better, recovering 0.1-0.3% against USD. However, BRL and ILS were out of the general trend, weakening 1.8% and 0.7%, respectively. Despite the bounce on the oil market, commodity-based currencies closed slightly in the red, reducing their recent outperformance. Specifically, AUD lost 0.4%, while NZD and NOK edged down 0.1-0.2%.