Rouble firms on U.S. stimulus hopes, three OFZ bond auctions in focus

MOSCOW, Oct 21 (Reuters) – The Russian rouble firmed ahead of three government bond auctions on Wednesday, hitting a more than one-week high against the dollar, as rekindled hopes for a new round of U.S. economic stimulus measures supported riskier assets.

At 0733 GMT, the rouble was 0.4% firmer against the dollar at 77.04, its strongest since Oct. 13. It had gained 0.2% to trade at 91.30 versus the euro.

Brent crude oil, a global benchmark for Russia’s main export, was down 1.1% at $42.67 a barrel.

Negotiations over a new coronavirus relief package were due to continue on Wednesday, with U.S. President Donald Trump having signalled a willingness to accept a $2.2 trillion aid bill despite opposition from his own Republican Party.

That helped riskier assets, but the external backdrop for Russia was only faintly positive, said Andrei Kochetkov, an Otkritie Brokerage analyst. The finance ministry’s three OFZ auctions might give the rouble the chance to firm past the 77 and 91 thresholds versus the dollar and euro respectively, he said.

Last week saw a record high placement of Russian government bonds, which are usually seen as a gauge of investor sentiment towards Russian assets.

Rising coronavirus cases at home and abroad continued to exert pressure on Russian assets, as did lingering political crises and a military conflict within Moscow’s sphere of influence.

“Local instability comes from a lack of risk appetite and unstable oil price dynamics due to the pandemic, sanctions and the precarious geopolitical situation and the upcoming U.S. election,” said BCS Global Markets in a note.

Russian stock indexes were rising.

The dollar-denominated RTS index was up 0.9% to 1,151.2 points. The rouble-based MOEX Russian index was 0.5% higher at 2,815.8 points.

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