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USD/RUB Heavy as CBR Struggles to Look Trough Transitory CPI Spike

RUSSIA
  • USD/RUB opens slightly higher as the shine comes off oil markets in early trading.
  • Brent futures pulled back from the $70 handle on concerns about rising stockpiles and demand risks surrounding Germany & France halting vaccinations due to AstraZeneca complications.
  • API inventories due later today, with ING warning the US return to production post-Texas freeze will lift crude oil stocks towards 500m bbls.
  • USD/RUB remains heavy, having taken out key psychological support at 73.00 – opening up the 72.6566 bear trigger.
  • Focus shifts to Friday's CBR with a final hold expected ahead of an expedited hiking cycle in April/June to contain persistent overshooting of CPI projections.
  • Successive upside surprises have undermined the CBR's ability to be confident in seeing through the transitory nature of the recent supply shock-induced price pressures towards medium- term disinflationary trajectory.
  • March CPI metrics will be key in gauging the start of the hiking cycle, with markets expecting Gov Nabuillina to guide towards preparing markets for future hikes at this meeting.
  • Intraday Sup 1: 72.8237, Sup2: 72.6566, Res1: 73.1217, Res2: 73.4212
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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