Ruble surrounded by sanctions, investors are in a panic

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After mixed dynamics in Asia, European stock markets attempted to open in the black, but settled in negative territory in response to further escalation of the trade war between Beijing and Washington, which have intensified in the context of the exchange of duties.
But the situation on foreign markets looks very calm in comparison with what is happening in the Russian market, which faced a wave of sales on the threats of new sanctions from the United States that the Russian Embassy has called “draconian”. Active sales are held in major stock indexes and most of the market. More than the others lose the shares of “Aeroflot” (-7%), which Washington may ban flights in the United States.
The ruble continues to incur large losses, renewing two-year lows. The pair dollar/ruble, who recently climbed to the mark of 65 rubles, opened a powerful gap up and in a moment reached the level of 66,56 RUB, and then corrected under the mark 66 RUB
Traders continue to get rid of Russian currency in anticipation of the new package of sanctions in connection with the poisoning in Salisbury, in addition to the announced restrictions on the purchase of OFZ due to alleged interference in the election. Of adds fuel to the fire of General nervousness in financial markets and risky assets in particular against the background of a sharp aggravation of trade relations between the two largest economies in the world.
The fall of the ruble is unlikely to end.
After the entry into force of sanctions, if the bill is approved, it is expected a new round of sales. If the position of the White house suddenly softened, the currency will show a good rebound in conditions of extreme oversold.
Nathan Lambert
Head of research,
Global FX