The ruble soared, oil steadily strengthened
All week, the ruble has strongly strengthened its position. Though this zeal was rather like the desire to catch up with the departing train, because the other currencies of emerging and commodity-dependent countries since the last days of 2018 experienced a real rally.
This delayed reaction may play with a cruel joke: the natural correction of the obviously overheated emerging markets can quite suddenly and unexpectedly interrupt the series of victories of the ruble.
However, supporting yet more news. Oil continues to rise in the assurances of Russia and Saudi Arabia to reduce output, in accordance with the agreements that were reached at the end of the year.
Despite some drawdown in the stock markets, there remains a healthy demand for risky assets due to hopes for stimulus in China and good results of us companies. Recall the previous reporting season was just a disappointment, contributing to the reversal of the markets from peak levels by a sharp correction.
Then, this negative amplitude was strengthened by a hawkish fed. Now officials Reserve system “learned a lesson”, while indicating the strength of the us economy, and the willingness to pause in the monetary policy.
At the same time, China and the United States continues to see progress in the negotiations on mutual trade.That is now in the background of the ruble, we see a combination of several positive factors.
However, for the Russian currency remains strong specific risks: the threat of new international sanctions as well as the reaction of the economy to increase interest rates and taxes.