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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
RUSSIA
- We have seen recently that investors have been questioning if the Ruble ‘recovery’ was ‘real’ or just an ‘illusion’ as some analysts are expecting up to a 30% contraction in GDP in 2022 with the CDS market still pricing in up to a 90% probability of sovereign debt default within one year.
- This chart shows the strong divergence between EURHUF, which has become a proxy for geopolitical risk linked to the Russia/Ukraine conflict, and EURRUB, which was recently trading close to a 7-year low.
- Even though the recent HUF weakness was attributed to Orban’s recent tax plan, the HUF depreciation in recent weeks was partly driven by the renewed geopolitical tensions.
- It is hard to believe that the Ruble could be that strong given the fact that the economy is expected to crash in 2022.
- This morning, the CBR decided to cut its benchmark rate by 300bps to 11% at its emergency meeting (as hinted in its latest April meeting) and holds open the prospect for more rate cuts in the coming meetings to stimulate the economy.
- Yesterday, Putin said during televised meeting with officials that economic situation was ‘not easy’ this year, adding that inflation should not exceed 15% in 2022.
Source: Bloomberg/MNI
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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