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USD/RUB Gaps Above its 200dma as Oil Weakness, USD Strength Inject Upside Momentum

RUSSIA
  • USD/RUB gaps higher at the open, breaching the 75.00 handle as USD strength and weakness in oil markets weigh on RUB sentiment.
  • USD/RUB currently trades +2.28% higher since the start of the week, with increased hawkish bets on the CBR rate cycle doing little to offset a firmer greenback and sharp turnaround in oil markets (-5% since Monday).
  • Uncertainty over OPEC+ supply continues to drive risk aversion in oil markets, with traders eyeing a possible inventory build in EIA data today after APIs fell less than expected on Tuesday.
  • On the CPI front, both headline & core readings surprised to the upside at 6.4% y/y & 6.6% respectively, bolstering expectations for a larger CBR hike in the 75-100bp range at the next meeting. 3x6 FRA-Mosprime spreads now pricing in 137bp of hikes (+7bp today).
  • Although price pressures are expected to moderate into year-end, Nabiullina is unlikely to want to be behind the curve on combatting overshooting pressures –
  • boosting the likelihood of a larger hike in line with guidance on possibly exceeding the neutral rate in the near-term to ensure a move towards a more decisive disinflationary trajectory.
  • USD/RUB is now trading above its 200dma at 75.00, with a close above here being a notable bullish development – provided USD strength is sustained.
  • Intraday Sup1: 74.8061, Sup2: 74.0285, Res1: 75.3055, Res2: 75.5873
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
BulletEM BulletEmerging Market NewsHomepage
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
BulletEM BulletEmerging Market NewsHomepage

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