Russian FX - Ruble Weakness To Persist But Late-July Reprieve Possible
With the long-awaited Essar Oil deal yet to go through and the bulk of conversions to FX of ruble-denominated dividend proceeds still in front of us, the recent weakness in the ruble has mostly been driven by other flow-related factors. Key global catalysts have been the oil volatility and very real risk of new sanctions from US. As a result, according to CFTC, positioning data, international speculators have moved into net short ruble territory for the first since December 2015. However, this month we expect local triggers to have a greater influence on the exchange rate and FX liquidity. Although we expect the ruble to be generally weak in July and August, amid a seasonally weak current account, we anticipate an isolated period of good support for the ruble toward the end of this month and on through the week ending August 3.
Sberbank CIB Investment Research is a research firm offering equity, fixed income, economics, and strategy research. It covers analysis on all aspects of Russia’s capital markets, issues and industries. The firm analyzes trends in Russia and combines local knowledge with a global perspective. It processes macroeconomic data, market and company-specific news, stock quotes and other information for providing research reports. The firm provides details and latest prices on the most traded names and most traded paper on all segments Russian market. In strategy research, it provides thematic research, tips and descriptions of the methodology used to evaluate companies.
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