Ruble Headed for Biggest Gain in Month, Bond Yields Fall on Oil
The ruble appreciated against the dollar for the first day in four and yields on Russia’s international debt fell as investor appetite for riskier assets increased on bets Europe’s debt crisis will be contained.
The Russian currency gained 0.4 percent to 31.9175 per dollar as of 4:17 p.m. in Moscow, heading for its strongest daily advance since April 24. The country’s $3.5 billion of Eurobonds due 2020 rose, sending the yield eight basis points, or 0.08 percentage point, lower to 3.979 percent.
Brent crude climbed 0.8 percent to $107.63 per barrel after opinion polls showed Greece’s New Democracy party, which supports the country’s bailout plan, is in first place, a sign Greek voters may back austerity measures. The European Union is Russia’s largest trading partner.
“The ruble was oversold up to the moment when positive news came from Greece,” Sergey Fishgoyt, deputy head of foreign exchange at Moscow-based brokerage Otkritie Financial Corp., said by e-mail. The Russian currency may appreciate as much as 1.3 percent to 31.50 per dollar this week, he said.
The ruble weakened 0.2 percent to 40.11 per euro and was little changed at 35.6039 against the central bank’s target dollar-euro basket. Investors pared bets on the ruble weakening, with non-deliverable forwards showing the Russian currency at 32.4248 per dollar in three months, compared with expectations of 32.5365 per dollar on May 25.
The cost of insuring Russian debt against nonpayment over five years with credit default swaps was little changed at 252 basis points, according to data compiled by Bloomberg.
The ruble has depreciated 7.9 percent against the dollar since the end of April, heading for the biggest monthly loss since September. Over the same period Brazil’s real fell 3.4 percent, India’s rupee lost 4.4 percent and China’s yuan weakened 1 percent, the data show.
To contact the reporter on this story: Jack Jordan in Moscow at jjordan22@bloomberg.net
To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net
May 23 (Bloomberg) -- Goldman Sachs Asset Management Chairman Jim O'Neill, Luxembourg Finance Minister Luc Frieden and Jeremy Stretch, head of currency strategy at Canadian Imperial Bank of Commerce, offer their views on the possible creation of a common euro-area bond. This report also contains comments from Christian Schulz, an economist at Berenberg Bank, Marchel Alexandrovich, senior European economist at Jefferies International and Yannick Naud, a portfolio manager at Glendevon King Ltd. (Source: Bloomberg)
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