The emerging central bank interventions to prevent dangerous capital outflows are multiplying. Brazil started with an increase in the cost of money by 50 basis points on May 29th, which was followed on June 8th by the +25 bp in Indonesia. Also India has been moving in this direction, however preferring the direct intervention on the currency market in defense of the rupee.
On the emerging front, the behavior of the Russian ruble is intriguing us. There has been a clear bullish break against the dollar (UsdRub) that should bring the cross to 33.20 (now at 32.80) and this would not be nothing strange if it happened in a context of strengthening of the oil. As we can see from the graph, the two variables are always opposite to each other with drops of oil that coincide with a weakness of the ruble (on UsdRub) and vice versa. At the moment, the two indicators are uncorrelated and, considering that also the other currency measure that we use to predict the price of WTI, the cross AudNzd, is showing another issue, then we would not want the upward movement of the WTI in recent days to represent a nice trap for bulls (Graphic source: Bloomberg).
On the emerging front, the behavior of the Russian ruble is intriguing us. There has been a clear bullish break against the dollar (UsdRub) that should bring the cross to 33.20 (now at 32.80) and this would not be nothing strange if it happened in a context of strengthening of the oil. As we can see from the graph, the two variables are always opposite to each other with drops of oil that coincide with a weakness of the ruble (on UsdRub) and vice versa. At the moment, the two indicators are uncorrelated and, considering that also the other currency measure that we use to predict the price of WTI, the cross AudNzd, is showing another issue, then we would not want the upward movement of the WTI in recent days to represent a nice trap for bulls (Graphic source: Bloomberg).
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