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RUB Rally Stalls Slightly Ahead of CBR, Nabiullina Presser the Key Focus

RUSSIA
  • USD/RUB opens 0.28% lower after trading mostly sideways in yesterday's session around the 73.80 mark.
  • A slightly more vocal EU on sanctions has stalled the RUB rally slightly, but failed to see a major repricing of the risk premium seen when Navalny returned to Russia.
  • Focus shifts to tomorrow's CBR where Nabiullina is expected to keep rates unchanged at 4.25%, given recent inflation overshooting towards 5.2% necessitating a more cautious approach.
  • Focus will be on the presser for a hawkish tilt in guidance, but Nabuillina may fall short of signalling an expedited hiking cycle for fear of spooking markets.
  • RUB still remains undervalued at current levels and is yet to fully pare the full Navalny-induced reversal higher from ~73.20 vs the $.
  • However, a little bit of a pullback in brent from current levels on expectations for less supply cuts/possible supply increases may see RUB retrace some of the recent push lower, but maintain its overall bullish bias.
  • Most Sell-side 2021 targets in the 71-70 range. Sup1: 73.6452, Sup2: 73.4202, Res1: 73.9016, Res2: 74.2086
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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