The ruble and OFZ show mixed dynamics ahead of the CBR meeting during the day

MOSCOW, March 17 (Reuters) – Mixed ruble-denominated and ruble-denominated government bonds traded Friday afternoon ahead of today’s CBR board meeting, largely ignoring attempts to revive external markets that have been hit by a wave of turmoil this week amid concerns about banking sector.

By 12.10 Moscow time, the dollar / ruble pair was close to 76.55 until tomorrow, the ruble loses 0.2%, leaving no attempts to enter the plus.

The euro/ruble exchange rate was then 81.41, and the ruble is weakening by 0.3%.

Combined with the yuan, the ruble is currently losing 0.2% and is trading close to 11/11.

“Next week, the ruble will start to receive more active support from the tax period, which, together with the increase in oil prices, will support the ruble,” believes Alexei Antonov of Alor Broker.

OFZ yields on the near edge of the sovereign curve are rising, in the middle – the changes are small, and for long-term securities they are decreasing slightly.

“This morning the external situation has stabilized and investors are focused on the CBR meeting. Overall, CBR will maintain the status quo. In our opinion, this will support short OFZ,” said Dmitry Gritskevich of Promsvyazbank.

The results of the central bank meeting will be known at 13.30 Moscow time, and the management’s press conference is scheduled for 15.00. Analysts polled by Reuters predict no change in monetary policy and expect the key interest rate to remain at the current 7.50% pa, but the regulator’s rhetoric will be important in the current external environment and modest Russian inflation rates of recent times.

Oil remains a negative factor for the ruble, as it fell significantly in the last few days, and until the end of trading the local position in safe assets for the weekend may also exert pressure on the ruble.

Overseas, crude oil is already in the black with a barrel of Brent up 0.7% to be valued at $75.21, while on Wednesday and Thursday it fell below $72 for the first time since December 2021. fear of demand with the possible collapse of the global economy due to the emerging instability of the banking sector.

The main factor of pressure on the ruble exchange rate is the threat of a reduced inflow of foreign currency inflows for exported oil, combined with persistent geopolitical threats and the negative effects of the high budget deficit of the Russian Federation.

In Forex, the US dollar is now down half a percentage point against the euro ($1.0655), 0.4% against the yen (Y133.17), a quarter of a percentage against the yuan (6.8797), incurring losses as a safe-haven asset against most commodities and emerging currencies.

The current demand for risk is fueled by hopes that bailing out troubled banks will help avoid a global financial crisis.

US authorities are bailing out California-based regional First Republic Bank, which has been hit by the collapse of two other US midsize banks, Silicon Valley Bank and Signature Bank.

The move follows yesterday’s decision by the Swiss central bank to restore optimism to markets and provide financial assistance to Credit Suisse, which is also struggling and its shares have lost almost a third of their value this week.

In parallel, the European Central Bank on Thursday raised its key interest rate by 50 basis points, despite concerns that the current instability in the banking sector could force the regulator to halt its fight against inflation.

Now the focus is on the next Fed meeting, the results of which will be announced on March 22.

Some investors and analysts are hoping the Fed can slow down aggressive rate hikes to ease the strain on the financial sector.

(Moscow office)


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