G10 Price Action Reflects Moderation In Russia Worry, Yuan Gains After PBOC Fix

The Russian rouble was indicated sharply higher in offshore trade, posting its largest one-day gain since 1998 (note that the bulk of gains were unwound), as EU member states failed to reach consensus on banning Russian oil imports. The perceived odds of a swift imposition of embargo on Russian crude by European buyers faded amid Germany-led opposition to the proposal and comments from OPEC SecGen Barkindo, who suggested that alternative suppliers don't have sufficient capacity to replace Russia's output. The rouble's upswing occurred amid wide bid-ask spreads and particularly thin liquidity, with local markets shut for a public holiday.

• Fresh headline flow did not offer any notable positives re: situation on the ground in Ukraine, albeit Kyiv pledged to "continue intensive consultations" with Moscow, which came on the heels of news that Turkey will host a trilateral meeting with Ukrainian and Russian Foreign Ministers this Thursday.
• Demand for safe haven currencies abated, with the USD, JPY and CHF landing at/near the bottom of the G10 pile. The Antipodeans caught a bid in early trade before giving away those gains. European currencies outperformed amid reassessment of the situation in Ukraine.
• Offshore yuan caught a bid after the PBOC displayed the strongest bias in the daily fixing of USD/CNY reference rate since Oct 2020. The firmer-than-expected fixing stood in contrast to the People's Bank recent reluctance to allow for more redback appreciation.
• Final EZ GDP, German industrial output, Canadian trade data as well as U.S. trade balance & wholesale inventories take focus on the data front today.