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Wide Bid-Ask Spread Adds Challenges to RUB Trading; Risk Sentiment Sours in Global Markets

  • USD/RUB trades with multiple onshore quotes with the BGN around 106.32 & the REGN quote at 96.91.
  • The BGN quote rose +4.02% yesterday, trading in a wide 25.49% range within the 96.68-121.32 range, while the REGN held +1.19% higher at 96.91.
  • Given the breadth of the bid-ask spreads all are notably hard to trade and will hopefully normalize in a matter of days when the MOEX returns.
  • Retail sales and Weekly CPI figures are of interest today, but will not reflect the true impact of the wave of inflation and decline in economic activity to come from the invasion.
  • The situation on the ground remains tense with fighting in key cities still ongoing as Russia builds its position around Kyiv. Russian forces established a land bridge around the Sea of Azov yesterday, and Putin warned of large strikes coming on state security infrastructure as he turns up the heat on the conflict.
  • Risk sentiment soured yesterday in line with the escalation as many companies pulled out of Russia’s economy and EU members confirmed SWIFT disconnection for various Russian banks.
  • Oil and Natgas have surged +5.86% & 23.41% this morning with analysts noting the strongest fundamental backdrop for oil in over a decade with IEA releases being insufficient to offset its rise.
  • Prospects for a ceasefire remain low at this juncture as Russia’s forces seek to encircle Kyiv as their primary objective before coming to the negotiating table.
  • Nevertheless, the damage to Russian assets will be evident once markets reopen and the likely ensuing recession that the massive hike in rates a destruction of supply chains will bring.
MNI London Bureau | +44 020-3983-7894 |
MNI London Bureau | +44 020-3983-7894 |

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