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RUB Gains on Potential Biden-Putin Summit, But Troop Deployments Bely Major Risks

RUSSIA
  • USD/RUB trades -0.78% lower on the back of news regarding a potential Putin-Biden Summit, which has supported global risk sentiment.
  • Nevertheless, the extension of troop deployments in Belarus is a negative development, given that this is the most strategically relevant position for an invasion to cut of Kyiv from NATO.
  • Satellite imagery also shows increased troop deployment on the border as Putin ratchets up the pressure for the West to push Kyiv into accepting the Minsk agreements to bring about a ceasefire in the region as brinkmanship continues.
  • The immediate focus will be on achieving a ceasefire so that the risk of accidental provocations via shelling casualties doesn’t provide cause for a false-flag invasion, but beyond that the next key event is the Lavrov-Blinken meeting on Thursday followed by the Putin-Biden Summit.
  • Today, Russian & French FMs are set to speak, while Putin agreed to Russia-Ukraine meetings via the trilateral contact group. The situation remains notably tense and global markets remain vulnerable to ad-hoc developments in the crisis.
  • USD/RUB should remain within the 74.89-77.50 range this week in the absence of any new major escalations – but sentiment remains fragile and risks substantial.
  • Intraday Sup1: 76.015, Sup2: 75.587, Res1: 76.8878, Res2: 77.4994
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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