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USD/RUB Back Below 76, But Ukraine Headline Risks Keep Outright RUB Longs Tentative

RUSSIA
  • USD/RUB opens below 76.00 after a snap reversal yesterday post-Biden-Putin phone call eased concerns about escalating US-Russia tensions.
  • USD/RUB fell 10 big figures on the headlines as embedded risk premia unwound, with positive momentum supported by $ selling and firmer oil prices filtering through into today's session.
  • Brent futures notched higher following a larger than expected API inventories draw at -3.5m bbls vs -2.9 exp, but has been tempered somewhat by vaccine difficulties.
  • Going forward, RUB assets will continue to be affected by Ukraine headline risks – although significant signs of de-escalation are emerging.
  • NATO has brushed off Ukraine's attempts at accession thus far, Ukraine has urged diplomatic solutions and Russia has argued for the Minsk Agreement – all calming factors.
  • As noted earlier, sanctions risks for SolarWinds and election meddling remain a key tail risk that could derail recent RUB optimism.
  • Markets have seemingly offset the Putin "killer" comments from Biden in this recent move, but the sell side is still relatively cautious RE outright RUB longs at this juncture.
  • Intraday Sup1: 75.3544, Sup2: 74.9221, Res1: 75.9284, Res2: 76.4367
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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