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RUB Rattled By Putin Insults, Sanctions Threats - Risk Premia on the Rise

RUSSIA
  • USD/RUB opens flat to higher after a volatile session yesterday.
  • Comments from Biden labelling Putin a killer and saying that Russian would pay for meddling in US selections saw the cross spike ~1.7% higher before easing somewhat on a more accommodative Fed.
  • US relations remain a core focus as geopolitical risk premia re-build in RUB assets (5Y CDS + 16bp yesterday), despite Russia saying they're prepared to hedge against debt sanctions through CBR liquidity injections.
  • Sanctions uncertainty and rising UST yields should keep the cross tentative in the near-term, having fallen just short of breaking its 3-month consolidation pattern.
  • Oil markets softened this morning on the back of an EIA inventory build last night. Focus shifts to tomorrow's CBR where upside PPI & w/w CPI metrics reinforced concerns of an expedited hiking cycle to 1Q21 (MNI CBR Preview due today).
  • Intraday Sup1: 73.5599, Sup2: 72.9534, Res1: 73.9786
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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