Ruble Gains Bullish Footing on Wednesday Amid Shaky Oil Prices

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In anticipation of three OFZ treasury bond auctions by the finance ministry on Wednesday, the Russian ruble (RUB) gained momentum as the market anticipated details on an oil export price cap.

Ruble On a Roll

The ruble was trading at 62.37 against the euro (EUR) and was 0.3% stronger against the US dollar (USD) at 60.48 in the early London session on Wednesday. It had also strengthened by 0.3% against the Chinese yuan (CNY) to 8.45.

Following a months-long pause, Russia has dramatically raised its domestic borrowing in recent weeks. Last week’s auctions saw the finance ministry sell a record amount of government debt in a single day, and three documents will be auctioned again later on Wednesday.

As part of sanction efforts meant to penalize Moscow for its actions in Ukraine, traders are anticipating the announcement of a price ceiling on Russian oil exports by the Group of Seven (G7) nations, which is scheduled to go into effect on December 5.

According to a report from Sinara Investment Bank, the oil and gas industry on Russian stock markets is suffering from uncertainty surrounding Russia’s oil exports, but the announcement of the price ceiling today could provide clarity.

The price of Brent crude oil, the primary export from Russia, increased by 0.9% to $89.1 per barrel yesterday but surrendered gains today after falling to the $85.7 low.

Global Equities Also Making Bullish Strides

In the meantime, Wednesday saw declines in the Russian stock indices. The RTS index in US dollars fell 0.6% to 1,136.1 points. The MOEX Russian index, which is based on the ruble, fell 0.7% to 2,181.2 points.

In Asia, despite an increase in COVID-19 cases in mainland China, which has investors concerned about how much the new outbreaks may stall the recovery of the second-largest economy in the world, Asian equity markets were largely upbeat on Wednesday.

After US equities closed the previous session higher, MSCI’s largest index of Asia-Pacific shares outside of Japan increased by 0.3%. This month, the index has gained 12% so far.