Ruble Erases Weekly Drop as Crude Climbs, Brexit Wagers Reduced

Would Brexit Cause a ‘Massive’ Drop in Markets?
  • Russian currency is best performer in emerging markets
  • Brexit campaign put on hold after UK lawmaker killed

The ruble erased its weekly decline and Russian government bonds advanced as oil prices climbed and investors pared bets the U.K. will leave the European Union, increasing demand for emerging-market assets.

The currency of the world’s biggest energy exporter strengthened 1.5 percent to 64.825 per dollar as of 5:40 p.m. in Moscow, reversing its first weekly decline since May 22 and climbing the most on Friday among 24 emerging-market currencies tracked by Bloomberg. Five-year government yield fell five basis points to 9.07 percent, dropping for the first time this week, while stocks rose the most in a week and a half.

Markets worldwide have been buffeted as investors weigh the chances of Britain’s possible departure from the EU in a June 23 referendum and the impact that would have on the global economy. The murder of a U.K. lawmaker on Thursday halted campaigning and spurred speculation the nation will be less likely to vote to leave.

“Fading market concerns about Brexit” are lifting the currency, while “the ruble is also supported by a rebound in oil prices,” said Piotr Matys, a Rabobank strategist in London. “That said, scope for gains could be constrained as uncertainty about the outcome of the U.K. referendum may prevail with focus on fresh opinion polls, which will be released over the weekend.”

Brent crude surged 2.7 percent to $48.48 per barrel, paring the biggest weekly drop since May, as a weak dollar boosted the appeal of commodities. Crude and natural gas contribute about 60 percent of Russia’s export earnings. The Micex stock index advanced 0.6 percent.

Anxiety stemming from a so-called Brexit curbed demand for riskier assets over the past week, wiping more than $2 trillion from the value of global equities and sending bond yields to record lows in the U.K., Germany and Japan. Campaigning for the referendum was halted through Friday following the killing of Jo Cox, a member of Parliament who was a proponent of Britain remaining in the EU.

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