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Ukraine Tensions Keep USD/RUB Choppy, Markets Eye CBR Hike

RUSSIA
  • USD/RUB opens higher as sabre-rattling with the West over tensions with Ukraine and pressure to provide adequate medical care to Navalny dent Russian sentiment.
  • Reports of broken ceasefires on the Donbass and UK destroyers heading to the Black Sea are likely to keep tensions high and USD/RUB choppy this week as the headline ping-pong resumes.
  • Markets will also be watching EU discussions today regarding Navalny for further sanctions threats from the UK & EU.
  • Oil markets slipped this morning as rising covid cases in India and a possible fourth wave for Japan raised demand-side concerns.
  • Primary focus this week remains on Friday's CBR meeting where markets are expecting a second 25bp hike in line with CBR promises of a gradual tightening to offset rising inflationary pressures.
  • Last week 3x6 Fra-Mosprime spreads narrowed 29.5bp from a peak of +115bp to +85.5bp. USD/RUB should occupy the 75.50-77 range this week, unless concrete signs of de-escalation with Ukraine emerge - which seems slightly premature at this juncture.
  • Intraday Sup1: 76.0210, Sup2: 75.7372, Res1: 76.3312, Res2: 76.6621
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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