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Buoyant Oil Markets Bolster RUB, 5th Consecutive EIA Draw Eyed Today

RUSSIA
  • USD/RUB opens lower in line with early weakness in the BBDXY and support coming from sustained upside in oil markets.
  • Brent is seen pressing higher above $75/bbl in low vol conditions, bolstered by a larger-than-expected API inventories draw overnight at -7.2m bbls vs -3.9m exp as the demand outlook continues to improve.
  • Markets will eye EIA inventories today for a possible fifth consecutive drawdown for further catalysts to the current rally.
  • USD/RUB moved back below 73.00 in yesterday's session as soothing words from Powell on the rate hike trajectory drove a return to risk assets into the back end of the session.
  • The announcement of further covid restrictions in Moscow has done little to dent RUB sentiment but may have been tempered by comments that hard lockdowns would only come in extreme situations.
  • Industrial production data and weekly CPI will be monitored this afternoon for CBR drivers as the bank remains cautious about rising demand-driven price pressures.
  • Sustained upside momentum in weekly CPI data may bolster hawkish bets for another +50bp hike at the CBR's July meeting.
  • Intraday Sup1: 72.3409, Sup2: 72.0413, Res1: 73.0263, Res2: 73.2003
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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