Trial now
US TSYS

Belly-Led Cheapening In Wake Of Retail Sales

AUSSIE 10-YEAR TECHS

(Z1) Turning More Neutral

ECB

ECB Plays Down FT Story

AUSSIE 3-YEAR TECHS

(Z1) Incline Accelerates

Navalny Verdict Make or Break for RUB

RUSSIA
  • USD/RUB opens lower in line with EM peers and firmer oil markets.
  • Brent continues its uptrend this morning, bolstered by signs of commitment to output cuts.
  • Focus today remains squarely on the Navalny trial due to start at 0800GMT.
  • RUB has been underperforming, based on expectations for EU & US sanctions action following the official imprisonment of Navalny for up to 3.5 years.
  • Kremlin's hardline stance on the issue being strictly domestic, has accelerated calls for sanctions of key oligarchs and Russian officials. An overly harsh sentence will likely elicit a harsh sanctions approach from the EU (RUB negative), following Borrell's meeting at the end of the week.
  • However, the Kremlin may try to buy time through a slightly reduced sentence and extend it later once the hype has died down.
  • Sell-side still confident RUB remains undervalued, but stress timing remains key.
  • Spot is holding below 76.00, but may drift higher towards 76.3870 on signs of a long sentence for Navalny.
  • Easier sentence, may see a push lower towards 75.25, followed by 75.0908, however, uncertainty will likely keep the cross choppy in the near-term
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com