FX basket was a stubborn creature, trading all day within 35.55/65 range on pretty thin flows. Main action in rates space where curve jumped 5bps in the morning on worse global markets performance, and then biggest Russian local bank came hitting all bids across the curve (last week did same in opposite direction), and couple more followed placing cash at 6.0-6.25%+ levels, pushing it down by 20 bps in the front dates. This flow was matched with steady paying interest from intl RM and corps who are borrowing RUB in 2-3m tenors via forwards and fx rolls.
Strong macro stats today, with inflation slower from previous weekly marks reaching 5.5% YTD. Simultaneously, PM Putin drops a juicy promise in his pre-election speech to take inflation down to 3-3.5% next year. Industrial output is 3.6% YoY, which coupled with 4.8% Q3 YoY GDP print recently indicates better resistance to ongoing global turbulence.
RUSSIA’S CONSUMER PRICES RISE 0.1 PCT IN LATEST WEEK, UP 5.5 PCT SO FAR THIS YEAR – STATS SERVICE
RUSSIA OCT INDUSTRIAL OUTPUT UP 3.6 PCT Y/Y (+3.9 PCT IN SEPT, RTRS POLL 3.6 PCT) – STATS SERVICE
CAPITAL OUTFLOWS FROM RUSSIA SLOWED DOWN IN OCT-NOV FROM SEPT – FIRST DEPUTY CBANK CHAIRMAN
BARCLAYS CAPITAL
ECONOMICS RESEARCH INSTANT INSIGHTS