by James

Oil is down hard today, as are most risky assets. The ruble is following suit with its sharpest correction in five weeks (see Bloomberg story here). The fundamental connection is high and it would be easy to write-off the ruble’s fall as logical. But, there may be more behind it. As this chart shows, ruble [...]

by James

Russia and Brazil are often grouped together. As key emerging markets, they feature heavily in GEM and BRIC portfolios. Specifically, these two markets merit direct comparison as they are both natural resource exporters, while China and India, their BRIC peers, are both dependent on imports. It would make sense, then, to expect Brazil and Russia [...]

by James

As Moscow finally freezes over (the snow comes later each year) the country’s annual gas stand-off with Ukraine is heating up. Will the media be full of supply cut stories again as they were in the past? Is Russia right to demand “market prices” or does Ukraine have a point? Ukraine has been at the [...]

by James

Global markets appear to be sustaining their rally, with US equities up some 20% from their trough as we move into the year-end period. But the uncertainties are still high. Markets are due for some kind of rally, but committing heavily means taking on substantial risk. For its part, the Russian market remains pressured, largely [...]

by James

Nouriel Roubini (a.k.a. Dr Doom) has today made some very interesting points about the ruble. He argues that we should now expect a bigger step move down, and I am inclined to agree with him: > Small step moves increase expectations of devaluation, increasing capital flight; > A key reason for preventing a sharp decline [...]

by James

As oil prices have dropped below key fiscal support levels over the last few months, the outlook for the ruble has become a national concern. The currency rose steadily for five years but reversed course in July. Since then, it has given up most of its gains. After proudly portraying the ruble’s strength as a [...]

by James

Volatility rebounded during what could easily have been a quieter time last week. Absent major drivers, the markets continued to price in the economic impacts of a total credit freeze. Global equities are beginning to reflect a significant downturn, and prices are beginning to look attractive, short-term risks not withstanding. The S&P 500 lost 6.2% [...]

by James

Driven by strengthening oil prices and fiscal prudence, the ruble steadily appreciated against the dollar for four and half years, until this summer. Much of that time it was criticized as being undervalued, as the central bank logically prioritised exchange rates ahead of inflation in a somewhat futile effort to prevent Dutch disease. The consequence [...]