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Brent Marches Past $65 On Big API Draw, RUB Consolidating

RUSSIA
  • USD/RUB trading flat to higher at the open, despite firmer oil markets.
  • Brent extended its gains this morning after signs of Saudi supply hikes pulled futures lower yesterday.
  • Concerns about freezing Texas temperatures and a sizable API inventories draw at 5.8m bbls vs 2.2m exp bolstered oil markets amid supercycle optimism.
  • USD/RUB continues to be driven by $-side developments and broad risk sentiment, but today's focus is on a raft of local data points including retail sales, unemployment and real wages.
  • Nabiullina's meeting with the Banks association will also be monitored for more hawkish commentary.
  • With sentiment shaky, sell-side seems more neutral on EM FX at these levels, awaiting cleaner conditions before making more decisive calls on directionality.
  • RUB still remains undervalued, however, and should be one of the primary beneficiaries of a return to risk-on conditions and a compression in UST's, given stronger brent prices.
  • Res1: 73.9016, Res2: 74.2086, Sup1: 73.6452, Sup2: 73.5479
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com

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