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ruble

  • 9
    JUL12
    Ruble REER continued to weaken in June, declining 4.3% MoM

    The ruble real effective exchange rate weakened 4.3% MoM in June, intensifying from a drop of 1.7% MoM (CBR upgraded May data from -2.0% MoM), bringing the YTD change to a negative value of -0.4% (from +4.0% in January-May). The ruble fell against the dollar,...

  • 18
    DEC14
    RUB: recovery

    Yesterday, RUB firmed near 10.3% against USD to close at 61.59; during the day it traded below 60.00 for a brief period. Trading was still rather choppy given the fragmented liquidity after the spike in volatility at the beginning of the week. Total daily turnover was near USD 5.6bn, which is higher than the average daily turnover in the first half of December, but still we would expect higher flows given the magnitude of the price action. Brent crude oil gained near 1.2% yesterday and closed at...

  • 16
    DEC14
    RUB: almost 10% in the red

    Yesterday, RUB recorded one of the weakest (if not the weakest session) in its history. By the end of the session, RUB had lost near 9.3% against USD (64.24) and near 9.2% vs. EUR (80.09). RUB has now lost near 48.9% YTD, which makes it the weakest-performing EM currency this year. Interestingly, Brent crude had traded 2.0% stronger during yesterday’s session, but offered no support; however, by the end of the day, Brent closed some 2.0% down at USD 59.8/bbl. The EM FX index fell 1.4%, – barely comparable...

  • 15
    DEC14
    RUB: in the red

    On Friday, RUB lost near 4.4% against USD (58.28) and 5.1% vs. EUR (72.75). In the background, Brent crude oil declined simultaneously, slipping 2.7% to 61.1 USD/bbl; but RUB's price action was also an echo of Thursday’s late night crude drop. Overall, RUB weakened 9.3% WoW last week vs. USD, whilst Brent was down 10.5% WoW. Meanwhile, NOK remained under pressure having closed down 0.8% against USD on Friday. Nevertheless, the Norwegian central bank cut the policy rate 25bp on Thursday, which fuelled...

  • 12
    DEC14
    RUB: still under the cosh

    Yesterday, RUB lost near 1.6% against USD, having closed at 55.72. At the beginning of the day, USDRUB opened at 54.70, yet it spiked after the CBR’s monetary policy announcement. Furthermore, Brent started sinking and closed 1.5% down at 62.80, which spoiled the risk sentiment in the Russian FX market. However, NOK also reacted negatively, ending about 1.8% in red yesterday. Meanwhile, the EM FX index weakened 0.5-0.8% against USD, with ZAR and TRY losing 0.5-0.8%, while MXN and BRL slipped 1.4-1...

  • 10
    DEC14
    RUB: weaker again

    Yesterday, RUB recorded yet another weak session, slipping 0.8% against USD (54.24). Intraday volatility was fairly low, as USDRUB was within the 54.00-54.25 range for most of the session. Trading activity remained subdued, with total MICEX turnover in USDRUB reported at just USD 3.0bn. Hence, during the last two sessions RUB’s swings have happened amid relatively poor liquidity. Meanwhile, Brent crude rebounded 0.4% to USD 66/bbl, whilst the EM FX index firmed 0.3% vs. USD. In particular, ZAR gained...

  • 9
    DEC14
    RUB: can’t resist the oil

    Yesterday, RUB weakened 1.7% against USD, closing at 53.80 amid fairly low trading activity: total turnover in the MICEX was just USD 3.6bn. A triple-whammy of disappointing economic data, alongside fresh slippage in the oil price, was the main focus for markets yesterday. The latest trade data for China featured slower export growth and a 6.7% decline in imports. In Japan, real GDP growth for 3Q14 was revised down to a 1.9% annualised decline. Hence, EM FX index slipped 0.4%. Brent crude declined...

  • 8
    DEC14
    RUB: rebound on CBR's FX interventions

    On Friday, the CBR presumably intervened twice in the FX market: early in the morning and around 18.00. The official numbers are to be published tomorrow but, judging by the spikes in trade volumes, we think that it was regulator. Overall, total turnover in USDRUB on Friday was near USD 5.2bn. Thus, in the morning the CBR's interventions brought USDRUB from 54.20 to 53.00. Later it picked up back to the 54.00 level, at which the CBR pushed the button once again. Hence, in the end USDRUB closed at...

  • 5
    DEC14
    RUB: down again

    Yesterday, RUB lost near 2.4% against USD (54.46). The FX market opened a little stronger on the back of CBR’s changes to FX repo as well as verbal interventions, but lost the ground around noon. Meanwhile, the Brent crude oil price slipped 1.0% to 69 USD/bbl, but as we have highlighted before, crude oil volatility (unless it is a sharp move) has not impacted RUB performance. The key issue is the misbalance between the price of USD and RUB liquidity. Separately, the EM FX index weakened 0.10-0.15%...

  • 4
    DEC14
    RUB: CBR in the market

    Yesterday, the Russian FX market opened in the red with USDRUB quickly spiking to 54.85-54.90. However, around noon the CBR reportedly intervened for a second time in the week, pushing USDRUB as low as 52.50-52.80. We understand that the CBR has a trailing offer selling FX in portions at the market’s price. Hence, the regulator does not defend any particular level in USDRUB, but rather is providing liquidity to the market. However, compared with previous rule-based FX interventions, the present approach...

  • 3
    DEC14
    RUB: underperforming crude oil

    Yesterday, RUB weakened 4.3% against USD to close at 53.97. In the morning, the FX market traded on a stronger footing for a couple of hours, but pressure mounted later. As we have highlighted before, one of the main factors behind RUB’s poor performance is the rapidly building US dollar deficit issue, which basically means that on a marginal basis USD liquidity is more expensive than RUB liquidity. Clearly, it carries some negative spill over into the FX spot market: with implied volatility of 35-40%...

  • 2
    DEC14
    RUB: did the CBR intervene?

    Yesterday, RUB kicked off substantially lower on the back of the decline in the oil price. We also believe that in the morning banks covered household FX demand that accumulated over the weekend. This quickly pushed USDRUB up to 52.00 and to 52.50 within a matter of hours. After some brief consolidation, USDRUB spiked as high as 53.90, where the market discovered a decent offer. We estimate that someone sold near USD 1.2bn at these levels. Reuters and Bloomberg, citing some trades, reported that...

  • 2
    DEC14
    Local sovereign debt: back in the red

    OFZs recorded yet another weak session. On the belly, yields crossed the 11% level – in particular, RFLB 18 7.50 closed at a yield of 11.05%. Overall, the curve widened near 15bp in the long and 20-25bp in the belly and front end. Thus, the curve became more inverted with the 2s10s spread widening to -16bp. The OFZ curve prices in monetary tightening of between 50bp and 100bp, in our view. Price wise, the longest bonds slipped near 0.9-1.0pp yesterday and mid-term issues were down near 0.5pp. Today...

  • 1
    DEC14
    RUB: at new lows

    On Friday, RUB was fairly stable, trading in the 49.15-49.75 range for most of the session. Total turnover in the MICEX was USD 4.9bn, which is relatively healthy compared to the flow figures in the first half of November. However, late Moscow time, the crude oil price dipped below 70 USD/bbl, which hurt RUB's performance. Brent stands near 67.8 USD/bbl, 5.4% lower below Thursday’s level. Hence, this morning USDRUB is hovering near 50.80, i.e. 4.4% in the red compared to Thursday. Meanwhile, NOK...

  • 1
    DEC14
    Local sovereign debt: down the road

    On Friday, the OFZ curve moved up near 14-17bp along all tenors, as the FX spot market remained under pressure. Hence, RFLB 28 (YTM 10.61%) lost near 0.9pp in price, while notes on the belly slipped around 0.5pp price wise. However, the shape of the curve has not changed substantially – in particular, the 2s10s OFZ spread has stayed near minus 5-10bp, while the 5s15s spread has held around -20bp.

  • 28
    NOV14
    RUB: oil lubricates slipway of decline

    Yesterday, RUB slipped another 3.2% against USD to close at 48.60. As we suggested, downward pressure on crude meant visible negative sentiment for RUB and other commodity-based currencies. In particular, NOK declined 1.20% as Brent fell 6.1% to USD 71.7/bbl. OPEC refrained from cutting oil production, leaving its output target at 30mmb/d. More disappointing was the absence of a commitment to adhere to the 30mmb/d ceiling (7 months out of 10 this year have been above 30mmb/d). Overall, we believe...

  • 27
    NOV14
    RUB: re-visiting the lows

    Yesterday, pressure on the Russian FX market mounted once again. By the end of the day, RUB had weakened 2.2% against USD (47.06) and surrendered 2.4% to EUR (58.83). RUB kicked off on a softer footing right from the morning, so the whole session was almost one-way trading. Clearly, the performance of Brent – the price slipped 0.8% yesterday and has declined an additional 1.3% this morning to USD 75.4/bbl – remains the dominant driver for RUB (at least in terms of sentiment). Assuming an average...

  • 26
    NOV14
    RUB: down again

    Yesterday, RUB lost 2.6% against USD (46.04) and slipped 3.0% vs. EUR (57.4). USDRUB surged to 45.20 early in the morning and went another leg higher in the afternoon, perhaps on the relatively weak Brent crude oil performance. The latter lost 0.5% yesterday, closing at USD 77.7/bbl. We also highlight that exporters’ hard currency offers likely evaporated yesterday as MET was left behind. Yet, trading activity was fairly decent with the MICEX recording a total turnover of USD 5.6bn. In the meantime...

  • 25
    NOV14
    RUB: regaining ground

    Yesterday, RUB firmed 2.2% against USD (44.87) and 2.0% vs. EUR (55.72). Overall, the rebound in crude oil prices over the last few days ahead of the OPEC meeting this week provided a positive background for RUB. In particular, yesterday NOK appreciated 0.4% vs. USD. In addition, exporters have finally increased the selling of hard currency, which resulted in increased trading volumes on the MICEX: yesterday’s turnover amounted to USD 6.9bn, while last week the average daily turnover was not higher...

  • 24
    NOV14
    Local sovereign debt: hand in hand with FX.

    OFZs gained 0.3-0.6pp in price terms on the belly and the longer end of the curve. Most of the price action happened in the evening, when crude oil prices surged. In the end, the OFZ curve tightened 10-12bp on the belly and 6-7bp in the long end. Hence, we think local investors (who are historically more active in mid-term bonds) played the first hand yesterday. RFLB 28 closed at a yield of 10.20%, while RFLB 19 6.70 ended at 10.40%.

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