Ruble Falls With Bonds as Truce Violated: Russia Reality Check

As markets react in real time to Russia’s incursion into Crimea and the annexation of the Black Sea peninsula, the ruble fell from the strongest level since January and bonds declined after pro-Russian rebels violated a cease-fire in Ukraine.

The ruble weakened 0.2 percent to 33.8710 per dollar at 12:50 p.m. in Moscow, paring its advance since Feb. 28, a day before Putin’s incursion, to 5.9 percent. While the currency surged yesterday after Putin asked lawmakers to rescind authorization to use force in Ukraine, insurgents shot down a government helicopter later, killing all nine people on board.

The chart shows the performance of stocks, bonds and the ruble, along with indicators of Russian investment risk. The yield on government bonds due February 2027 rose three basis points to 8.54 percent, extending the increase since Feb. 28 to 18 basis points. The Micex Index fell 0.8 percent to 1,506.03, giving an advance in the period of 4.2 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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