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RUB Feels The Pinch as Oil Slides Further Below $80/bbl

RUSSIA
  • USD/RUB trades +0.70% higher today, with weakness in oil markets combined with a firmer USD dragging the cross higher. Signs of renewed lockdowns in Europe sparked broad risk aversion this morning across EM FX and bolstered concerns of demand destruction in oil markets going into the winter period
  • Nevertheless, RUB remains among the few brightspots in the EM universe set against a firmer USD backdrop as markets price in an expedited Fed tightening cycle in 2022.
  • Robust fundamentals, strong terms of trade and expectations for ~150bp in hikes into 1Q22 remain core reasons for JPM's overweight rating on RUB in 2022 – highlighting EUR/RUB & ZAR/RUB shorts as potential outperformers.
  • USD/RUB has moved through the 73.50 handle with 73.9435 & 74.1011 the next near-term levels to the topside followed by major resistance at 74.4799 ((26 Aug high).
  • Price action has moved above the 200dma at 75.5283, which has been quite well defended in recent sessions. Markets will be looking for a close above to take the next leg higher.
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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