a month after the negative prices in the U.S. market, the situation looks much more optimistic than before the expiry of the contract for delivery in may. On Monday, Brent has exceeded $35 per barrel, reaching two-month highs, more than doubling compared to the minimum levels.

in Addition to oil positive background for the Russian currency make the news about the progress in the development of vaccines and drugs against coronavirus, as well as slowing the spread of the COVID in developed countries and Russia.

due to this, the ruble has returned to the lower boundary of the trading range of the past two months. USDRUB closed below 73. EURRUB is trying to break under 79 also traded breaking out of a range.

it is Worth remembering that the ruble falls sharply in the crisis, but then grow strongly and for a long time. This is because interest rates on ruble and ruble-denominated bonds yield significantly higher than most foreign counterparts. In growing markets this creates demand for carry trades.

In our case, the traders are also trying to ride the wave of expectations that the Bank of Russia will reduce the key rate. The market is now about “laid” in the price reduction of Bank of Russia key rate by 50 bps at the next meeting. However, the head of the Central Bank Elvira Nabiullina spoke about the possibility to cut the rate by 100 points, and in General gave the signal that the rate will be significantly lower.

For the markets is a reason to buy rubles now, to invest on them in the BFL. Low rates – a negative for the ruble only after the interest in this trade will decline. And have not yet seen the end point of the easing, the interest in the ruble may grow.

However, should be wary to refer to this strengthening. First, when the first signs of destabilization of the markets, the interest in OFZ could fade much faster than it was formed. Also to repay it can appetites of the Finance Ministry, which is to much to borrow on the markets.

the Situation now can be compared, as was the case in the spring of 2008. Then was dominated by the idea of carry trade and oil trade for the signs of health of China and other developing countries. But these attitudes began to melt at the realization that emerging markets are also beginning to suffer from the decline in demand in developed countries and do not have enough domestic drivers to grow independently.

During this time, the share of EM countries has grown significantly, China became the second economy, and developed countries even more mired in debt. But is that enough to bring global demand to sustainable growth? Want to believe in it, but to bet on it too early.

For the ruble, this means that at some point in the coming weeks, he may stop growing and return to decrease.