Yesterday, the upturn on the Russian FX market continued, supported by the rally on the oil market. Brent jumped to USD 48/bbl right from the morning and moved steadily up thereafter. RUB readily followed oil’s performance, opening with a gap at 66.00 against USD. By the opening of the US markets, Brent crossed the USD 49/bbl level, hitting USD 50/bbl a couple of hours later. Against this backdrop, RUB tested 65.00, but closed a bit lower, as Brent stepped back to USD 49.8/bbl, finally gaining 6.7%. RUB ended the session at 65.40 (+2.1%). Trading flows remained high, with MICEX reporting USD 5.9bn of turnover.
Risk appetite in the EM FX universe was also strong yesterday, with concerns regarding the Fed rate hike decision today seeming to take a back seat. ZAR was up 1.5%, TRY gained 1.0%, and MXN and BRL grew 0.9%. As for the Russian FX market, we believe that oil is to remain the main factor in the near term, whatever the Fed’s decision will be.