Ruble Falls With Russian Bonds as Oil Tumbles After Supply Data

  • Russian stocks pare gains as market awaits Alrosa pricing
  • Bonds drop, pushing yields to highest in almost two weeks

The ruble retreated with bonds and Russian stocks pared gains as oil fell after U.S. stockpiles data suggested a supply glut will linger.

The currency fell 0.2 percent to 64.36 per dollar by 7:45 p.m. in Moscow as the price of Brent crude, the benchmark used to price the nation’s main export blend, tumbled 2.9 percent to $47.40 a barrel. Bonds reversed gains, with the yield on government five-year bonds rising one basis point to 8.83 percent, the highest in almost two weeks, after U.S. inventories shank less than expected.

Propelled by a 32 percent jump in oil prices this year, the ruble has been the second-best performer in emerging markets. The Russian currency is often called “paper oil,” as the link between the ruble and crude runs “deep in traders’ psychology,” according to Denis Korshilov of Citigroup Inc.

“Oil immediately went from gain to a loss and so did the ruble,” said Korshilov, who heads fixed-income, currency and commodities at Citigroup in Moscow.

The Micex Index of stocks pared gains of as much as 1.2 percent to close up 0.2 percent at 1,882. Alrosa PJSC’s shares fell 1.6 percent to 67.63 rubles, the lowest level in almost five months, after the state started selling a stake in the world’s largest diamond miner to raise cash for a budget hit by lower oil prices and sanctions.

Shares in Russian telecommunications companies including M.Video PJSC and Mobile TeleSystems PJSC declined after President Vladimir Putin signed anti-terrorism legislation that could force them to spend more on surveillance and allow the government to tighten controls on the Internet.

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