The ruble rises in the last January trade, OFZ has a mixed dynamic ahead of the auctions

MOSCOW, Jan. 31 (Reuters) – The ruble traded higher on Tuesday evening as it tested three-week lows in the morning session. The volatile flows at the end of the calendar month may affect the price, and today it supported the ruble, although in general the set of current factors is against the Russian currency.

Meanwhile, at the end of January, the ruble shows almost zero dynamics against the dollar, but becomes cheaper against the euro and the yuan by 2% and 4% respectively, including reflecting the weakening of the US currency in external markets during the month, as well as the rise of the European currency and Chinese.

At 18.15 Moscow time, the dollar/ruble exchange rate approached the level of 70.00, and the ruble gained 0.6%.

The exchange rate of the euro/ruble pair was 75.88, here the ruble gains 0.9%.

Combined with the yuan, the ruble gains 0.6%, the quote is close to 10.34.

In the morning, the ruble reached its worst values ​​since January 9: 70.83 to the dollar, 76.84 to the euro and 10.47 to the yuan, while following the results of stock trading on Monday it fell by 1.4% against these three currencies.

“This is a consistent escalation of the information and geopolitical background, fears about the consequences of the price cap on petroleum products,” Rosbank analysts explained the weakening of the ruble to three-week lows.

According to a major Russian bank dealer, exporters’ local operations can now act as short-term support for the ruble: “Corporations are ‘tidying up’ and closing their balance sheets at the end of the month by selling the currency at favorable high-denomination exchange rates.”

In general, Russian export corporations made settlements with the budget the day before by paying ETP, thus reducing the tax support for the ruble, however targeted revenue sales can continue today and the Central Bank remains in the market with a small amount of foreign exchange intervention.

“Now the ruble has finally lost support for the settlement period factor, and the imminent imposition of sanctions on Russian oil products carries the risk of USD/RUB rising to 71.00,” Bank Saint Petersburg analysts say.

From January 13 to February 6, the Central Bank of Russia sells Chinese yuan from reserves with settlements “tomorrow” from January 13 to February 6 for 3.2 billion rubles a day (equivalent to $46 million).

Major crudes rose Tuesday evening, Brent futures for February 28 delivery rose 0.7% to $85.

Spot quotations of Russian Urals for delivery to North-West European regions trade at $50.81 a barrel vs. $52.60 at the close of the previous session .

Significant current discounts Urals to Brent and forced discounts for Asian recipients of Russian oil lead to a physical limitation of the inflow of foreign currency income to the Russian Federation and may be a significant factor of pressure on the ruble exchange rate.

On Tuesday, the ruble public debt market showed multi-directional changes in quotations with low transaction volumes, but negative dynamics prevail, which is typical for Tuesday, ahead of the Ministry of Finance’s auctions for the placement of primary public debt. Most securities yield between -2/+7 basis points.

Tomorrow the agency will offer three papers without limit, two – fixed coupon, PD-26241 and PD-26238, and an indexed OFZ, IN-52004.

Dmitry Monastyrshin of Promsvyazbank notes that before the auctions, the OFZ market is dominated by sellers, and the yield on long-term government bonds after the results of the trade may increase by 3-5 basis points. (Moscow office)