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RUB Brushes Off Oil Weakness as Blinken & Lavrov Set Up a Pow-Wow

RUSSIA
  • USD/RUB opens firmly lower on the back of some early USD selling pressure to pull back below 74.50.
  • Oil markets took a knock overnight as a firmer dollar, rising covid risks in India and the resumption of operations in the Colonial Pipeline overshadowed upbeat demand forecasts.
  • Traders remain bullish on the Brent outlook, but note that breaking the March highs will be challenging in the absence of improvements to India's Covid situation.
  • Lavrov & Blinken's commitment to earlier than expected talks on 20 May also helped buoy RUB this morning.
  • Focus on US PPI today for more US Treasury-induced volatility across EM.
  • Weekly CPI will also be monitored domestically for risks to the CBR's tightening trajectory following last week's downside surprise in headline CPI at 5.5%.
  • 3x6 FRA-Mosprime spreads have widened back to 87.5bp, having hit a low of 71.5bp on Monday.
  • Intraday Sup1: 74.1981, Sup2: 73.9703, Res1: 74.3885, Res2: 74.5050
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com

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