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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
- EURHUF, which has become a proxy for geopolitical risk linked to the Russia/Ukraine conflict, has been retracing sharply higher in recent weeks, diverging significantly from the EURRUB exchange rate, which was recently trading close to a 7-year low.
- EURHUF broke above the 400 level in today’s trading session and is currently trading at an all-time high as market uncertainty continues to weigh on the forint.
- 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.
- It is hard to believe that the Ruble could be that strong given the fact that the economy is expected to crash in 2022.
- Hence, as the Ruble is not a convertible currency anymore, which can attract arbitraging capital flows, the current level of EURRUB is likely to be ‘artificial’ and EURHUF may be a better proxy for EURRUB (along with Russia CDS, VIX…).
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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