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CPI Surprise Buoys RUB Ahead of Friday's CBR, Iran Uncertainties Plague Oil Markets

RUSSIA
  • USD/RUB opens marginally higher this morning on the back of an early bid in the USD.
  • Price action remained choppy around 72.75 support yesterday, despite a bout of USD weakness and increased hawkish bets on a +50bp hike in Friday's CBR following an upside CPI surprise at 6.02% y/y vs 5.8% exp.
  • This coupled with robust high-frequency data vindicates CBR's cautious stance on high demand pressure fuelling upside momentum in price pressures – necessitating a more decisive move to arrest price pressures.
  • Although consensus remains for a +25bp hike, this print will likely have changed a few minds in favour of +50bp.
  • Increased hawkish bets will likely support RUB into the meeting, but USD/RUB must negotiate sticky long-term support at 72.50, which has proven incredibly tough to breach this year.
  • Oil markets tempering RUB strength somewhat this week, given Iran deal uncertainty.
  • Markets will be slightly cautious at these levels ahead of the Biden-Putin summit, however, given the Kremlin's distinct show of concern over possible pre-meeting sanctions.
  • Intraday Sup1: 72.7509, Sup2: 72.5433, Res1: 72.9534, Res2: 72.0236
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
BulletEM BulletEmerging Market NewsHomepage
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
BulletEM BulletEmerging Market NewsHomepage

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