Russia FX Beat - November 13, 2017

> Today's focus. Downside risk to today's 3Q Russian GDP.
> Global trigger: UK in focus. Financial market conditions are benign, as reflected by low volatility and US equity markets near record highs. Contributing to this is that the outlook for Fed and ECB monetary policy to year end is quite clear. Therefore, if markets are to be jolted, it will likely be a result of some to this point unknown factor.
Investors are so confident that the Fed will raise rates next month that important US retail sales and CPI data on Wednesday may struggle to cause a ripple in financial markets. Of more interest might be an event tomorrow where central bank heads Yellen, Draghi, Carney and Kuroda are due to speak.
Calm in the US (tax reform aside) and eurozone could result in additional focus on the UK this week, where an already pressured government is putting important legislation on Brexit to parliament for debate. The process is complex, and with PM May struggling for support, we would not be surprised if the situation forced the pound even lower. For GBP/USD, the 1.30 level is very important and could come under threat.
> Bottom line. Today's schedule is very quiet. EUR/USD should hold close to 1.1650.
> Regional trigger: 3Q GDP to slow. Today Russia releases 3Q GDP data at 16:00 Moscow time. The consensus expects a slowdown from 2.5% y-o-y in 2Q to 2.0%. Our economists see downside risk, penciling in a figure of 1.7%.
Today US and Russian diplomats are scheduled to meet in Belgrade to discuss the potential deployment of UN peacekeepers in Eastern Ukraine in a bid to accelerate the Minsk peace process. This is unlikely to prove to be a market-moving event.
Looking to the rest of the week, we will watch closely a scheduled speech from CBR Governor Nabiullina tomorrow morning at 9:30, although it is likely to be too early for her to outline policy options for the upcoming December 15 decision.
The ruble traded in a tight range on Friday amid low turnover of just $3 bln on the Moscow Exchange. Investors will certainly be looking for more excitement this week, although there are no clear catalysts so far.
> Bottom line. USD/RUB has been in a consolidative mood since racing above 59 a week ago. We expect this level to hold today.