Russia FX Beat - August 25, 2017

> Today's focus. Yellen and Draghi speak.
> Global trigger: Big-hitters speak. Major FX markets have been extremely range-bound this week. Of the major currencies we follow, only the NZD has moved more than 1% against the dollar (-1.6%). EUR/USD is flat on the week.
Quiet summer markets are one reason, but another is that investors have been well aware of the event risk today stemming from the Fed's annual Jackson Hole Symposium. Fed Chair Yellen speaks at 17:00 Moscow time, while ECB President Draghi talks at 22:00.
Expectations are low for either to announce major new stimulus. Yellen will speak on the topic of financial stability. If there is a risk, it is that she reaffirms an expectation to raise rates this year. Given that this is only 40% priced in, it would lend the dollar support.
There is greater anticipation surrounding Draghi's speech. That said, any prior expectation that he might outline a forthcoming tapering of ECB QE looks to have been scotched by the surging value of the euro. He is therefore likely to steer clear of any new QE talk, though it will be worth noting the vigor with which he might try to talk the euro lower.
Prior to Yellen and Draghi, Germany sees the release of its August Ifo survey (11:00) and the US durable goods (15:30).
> Bottom line. Given Draghi's late billing, markets will not fully react to his comments until the Asia open on Monday. Verbal intervention might send EUR/USD lower toward 1.17. Investors will likely buy into any such dip.
> Regional trigger: Tax day. The ruble is rudderless, as many other currencies have been this week. For five consecutive trading sessions, USD/RUB has tested the 59 level. On each occasion, it failed to hold below it.
Today is the major August tax deadline, with a little over R500 bln due in the form of MET, VAT and excise duties. We do not expect this to generate much ruble demand, especially ahead of the Yellen and Draghi speeches. If neither delivers hawkish messages, we would expect a more risk-on environment on Monday, which would help USD/RUB to a serious test of 59.
> Bottom line. MICEX volumes are depressed, averaging $3.5 bln per day over the last 10 days compared with $4.3 bln over the first 10 days of August. USD/RUB should hold above 59 again today despite the imminent tax deadline.