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9 Apr 2015
Rouble’s link with oil prices remains broken – BTMU
FXStreet (Barcelona) - Derek Halpenny, European Head of GMR at Bank of Tokyo-Mitsubishi UFJ, comments on the EIA oil inventory data and the subsequent effect on oil-related currencies.
Key Quotes
“Our broad assumption for oil-related currencies was for oil prices to gradually rise in the second half of this year as the supply-demand imbalance slowly starts to rectify – that view is highlighted by oil-related currency forecasts showing out-performance in H2. However, after yesterday’s inventory data, our assumption of that supply-demand imbalance correcting may prove premature.”
“The EIA data showed inventories surged by 10.95mn barrels last week, the largest increase since March 2001 and takes inventories to another record level.”
“While the Norwegain krone and the Canadian dollar remain weak, the Russian rouble link with crude oil prices remains broken.”
“We find it hard to believe this can be sustained but for now the focus in Russia is on the improvement in the sovereign credit outlook and reduced fears of a major financial market disruption. Russia’s sovereign CDS shows this sharp improvement in confidence.”
“However, further falls in crude oil prices would surely result in these sharp rouble gains partially reversing.”
Key Quotes
“Our broad assumption for oil-related currencies was for oil prices to gradually rise in the second half of this year as the supply-demand imbalance slowly starts to rectify – that view is highlighted by oil-related currency forecasts showing out-performance in H2. However, after yesterday’s inventory data, our assumption of that supply-demand imbalance correcting may prove premature.”
“The EIA data showed inventories surged by 10.95mn barrels last week, the largest increase since March 2001 and takes inventories to another record level.”
“While the Norwegain krone and the Canadian dollar remain weak, the Russian rouble link with crude oil prices remains broken.”
“We find it hard to believe this can be sustained but for now the focus in Russia is on the improvement in the sovereign credit outlook and reduced fears of a major financial market disruption. Russia’s sovereign CDS shows this sharp improvement in confidence.”
“However, further falls in crude oil prices would surely result in these sharp rouble gains partially reversing.”