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RUB Firms, Despite Sanctions Preparations from the West

RUSSIA
  • USD/RUB trades -0.67% lower this morning, in line with a softer BBDXY and further upside in tight oil markets as analysts anticipate that OPEC will stick with its March output target, despite oil trading above $90/bbl.
  • Geopolitical risks remain the key focus, however, with Lavrov & Blinken expected to meet this week.
  • An interesting divergence played out on Friday with Ukraine’s Zelensky calling on the West to refrain from overplaying the risks of war in Ukraine, saying that the situation on the ground was less dire than it was being portrayed.
  • Meanwhile the US continued with sanctions threats and Russia showed positive signs of engaging on US/NATO responses to its security proposals.
  • US plans to impose sanctions irrespective of a Ukraine invasion should do little to help ease the situation, while the EU and UK develop their own sanctions packages.
  • Nevertheless, the focus will be on Lavrov and how Russia responds in the coming days with the situation still very fluid. USD/RUB has pulled back 3.86% from its YTD high at 80.4115, but remains volatile as the situation evolves.
  • Signs of more cooperation from Russia should be considered RUB positive as the wide risk political premium erodes, but any renewed aggression of signs of a breakdown in talks with be met with RUB weakness.
  • Key differences on Ukraine’s accession to NATO and NATO expansion remain, while pathways for dialogue exist in missile inspections and military drill parameters.
  • Intraday Sup1: 76.8878, Sup2: 76.537, Res1: 78.3048, Res2: 78.9079
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
BulletEM BulletEmerging Market NewsHomepage
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
BulletEM BulletEmerging Market NewsHomepage

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