The ruble: the threat of new sanctions
The ruble sank significantly on Wednesday amid Joe Biden's negative comments about Vladimir Putin. According to the American president, his Russian counterpart should soon face the consequences of attempts to interfere in the 2020 elections. The fact is that US intelligence recently published a report that pointed to possible attempts by Putin to influence the results of the recent presidential election.
The main question at the moment is how tough will the new sanctions be? Apparently, market participants still do not believe in really serious restrictions, such as a ban on the purchase of government bonds or disconnecting the country from SWIFT. However, the yield of government bonds still increased and is at the highest level since April last year – 6.87%.
Additional pressure on the debt market is exerted by the growth in the yield of treasuries and expectations regarding the tightening of the DCT by the Russian central Bank. Tomorrow, the Central Bank will hold a meeting, where the regulator will consider the possibility of increasing the key rate. Most likely, no changes will occur, but investors hope to get hints on the actions of the regulator in the foreseeable future.
Meanwhile, Jerome Powell was able to inspire market participants with optimism: the Fed rate was left at the same level, and the agency will continue to pump the market with liquidity, despite the unwinding of inflation in the United States. In addition, positive forecasts for the recovery of American GDP were announced: by the end of 2021, growth should be 6.5%.
Do not forget about the incentives. Very soon, Americans will start receiving money from the government, most of which will almost immediately be transferred to brokerage accounts.