Recorrelate of the ruble and oil continues
Recorrelate of the ruble and oil are continuing. Although a barrel of Brent fell to $73, ruble early in the morning conquers new frontiers at the level of 62.85 per dollar and 73,45 per Euro. All this is happening against the background of another of the calls from some U.S. senators like “very favorite” Russian media Lindsey Graham to strengthen sanctions against Russia, as well as the statements of the permanent representative of the United States to the UN, Nikki Haley that “the Americans and the Russians will never be friends.” All this, of course, familiar ear “white noise”, but many investors hate when the morning news hurts the eyes it is with these headers.
The Chinese yuan, meanwhile, in response to American import tariffs, the continued gradual devaluation, down for the past day on the background of complete absence of any news from 6.75 to 6.82 per dollar.
Nevertheless, the ruble continued to strengthen, partly interesting combinatorics of the CBR. First, yesterday it became known that the Bank of Russia decided to increase by 1%. the threshold of mandatory reserves on liabilities of banks in foreign currencies, which are based on foreign currency deposits and foreign currency current accounts. Thus, the ability of banks to charge attractive interest rates on foreign currency deposits will be even lower, and it probably will fit the idea of a mega – regulator, to make it less attractive to currency transactions for banks and their customers.
This increase will reduce the attractiveness of foreign currency deposits – including non – residents- which recently renewed little by little began to spin the flywheel carry trade – especially in relation to the citizens of the Eurozone, where the tapering of “quantitative easing” – not to mention the rate hike, the ECB – with each passing month, looks more and more distant and vague prospect. This, of course, will support the ruble and make it more attractive investments in ruble instruments, in particular in the BFL.
Speaking of the latter, a greater positive impact on the ruble also provides news about the intention of the Ministry of Finance to continue the experiment with “people’s OFZ”, for which the Central Bank has joined the list of accredited for direct sale to the public OFZ in two additional Bank “Post Bank” and “Promsvyazbank”. The yield, which at the moment offer “mininuke” exceed the yield on the same maturity investments Bank deposits.
However, Bank deposits is a passive investment, whereas investment in government bonds operate in two ways: first, sterilize non-current ruble money supply, and secondly, increase the maneuverability of the Russian financial authorities. It’s all positive for the ruble, and it will be such to remain on the background neutral, by and large, the external background in anticipation of a possible second meeting between Putin and trump in September in Washington. It is clear that is unlikely now to win the “destructive forces” that on this background in fact and not in words, and want to continue to tighten the screws.
“International financial center”