Ruble Rallies With Stocks, Bonds as Oil Jump Buoys Russia Assets

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The ruble strengthened for a third day, climbing with stocks and government bonds amid a rebound in prices for crude oil, Russia’s main export earner.

The ruble gained 0.7 percent to 65.7775 per dollar as of 7:31 p.m. in Moscow, the strongest closing level in almost two weeks. The yield on 10-year local-currency notes fell three basis points to 8.51 percent and the Micex stock index added 1.3 percent, the most since July 12.

The ruble has recovered from a record low in January as crude prices climbed, making it the third-best performing currency in emerging markets this year behind Brazil’s real and South Africa’s rand, data compiled by Bloomberg show. Brent has surged more than 5 percent since Tuesday as investors speculated the commodity’s recent declines were overdone.

“The ruble is trading as a proxy to oil,” said Dmitri Petrov, an analyst at Nomura International Plc in London. “Crude rebounded substantially, as the narrative around oil became more constructive.”

Petrov said he sees a 1.2 percent gain for the ruble to 65 per dollar by the end of the year if crude trades in the range of $40-$45 a barrel.

Brent, used to price the country’s main export blend, added 2.2 percent in London to $44.05 a barrel, reversing a drop of as much as 1.4 percent earlier. The Micex Index of shares climbed, as oil producer Lukoil PJSC advanced 1.5 percent. The Moscow Exchange MICEX-RTS PJSC gained 3.2 percent, the most in almost a month, after reporting second-quarter net income that exceeded estimates.