Micex to Ruble Gain on Cease-Fire Prospect: Russia Reality Check

As markets react in real time to Russia’s incursion into Crimea and the annexation of the Black Sea peninsula, the Micex Index rose for the first time in three days amid prospects for a cease-fire in Ukraine.

The equities gauge added 0.3 percent to 1,490.25 by 1:18 p.m. in Moscow, extending its advance since Feb. 28, a day before President Vladimir Putin’s incursion, to 3.2 percent.

Ukraine’s President Petro Poroshenko today reiterated a plan to end fighting in the southeast of the country after talks with Putin last night, Interfax reported. JPMorgan Chase & Co. raised Russian stocks to the equivalent of buy from the equivalent of sell, citing the “fading of the Ukraine crisis,” according to an e-mailed note today.

The chart shows the performance of stocks, bonds and the ruble, along with indicators of Russian investment risk. Yields on government notes due February 2027 fell three basis points to 8.72 percent, taking the increase since Feb. 28 to 36 basis points. The ruble strengthened 0.4 percent to 34.6890 per dollar, leaving its appreciation in the period at 3.3 percent.

The top panel displays the value of the Micex Index of 50 Russian equities, government debt in the Bloomberg Russia Local Sovereign Bond Index, and the ruble relative to the dollar. Credit default swap rates on Russian bonds due in five years appear in the bottom panel. The yield gap between Russian debt and U.S. Treasuries and the one-month implied volatility of the ruble are also tracked.

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