Russian Markets Climb as Putin Detente With U.S. Upstages Oil
Russian stocks and the ruble advanced for a third day as improving relations with the U.S. and Europe boosted bets sanctions will be scaled back. Citigroup Inc. said the currency remained vulnerable to fluctuating oil prices.
The ruble strengthened 0.4 percent to 64.893 per dollar by 4:55 p.m. in Moscow, bringing its gain this week to 2.9 percent. The Micex Index climbed 1.6 percent on Wednesday and bonds rose, pushing the yield on five-year notes nine basis points lower to 9.97 percent. The Finance Ministry sold all 10 billion rubles ($154 million) of February 2027 bonds and 5 billion rubles of January 2020 floating-rate securities, the entire targeted amount, at the two auctions today.
Geopolitical developments have moved to center stage for investors amid greater cooperation between Russia and its former Cold War foes as their interests align to fight Islamic terrorism. President Vladimir Putin and his U.S. counterpart Barack Obama met at this week’s Group of 20 summit and Putin made concessions on a debt deal with the Ukraine.
“Removing various restrictions imposed on Russia would definitely ease the burden on its economy and allow economic growth to regain better traction sooner,” said Piotr Matys, a strategist for emerging-market currencies at Rabobank in London. “It is not only about oil.”
Citigroup Caution
Standard & Poor’s said Tuesday that a rapprochement would warrant a reconsideration of its junk rating for the country if it results in the U.S. and Europe easing international sanctions that have contributed to Russia’s economic slump.
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http://www.bloomberg.com/news/articles/2015-11-18/russian-markets-climb-as-putin-detente-with-u-s-upstages-oil