Re-Aligning Ruble With Oil: Fed Hiccup...

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Includes: BNO, DBO, DNO, DTO, DWTI, ERUS, OIL, OLEM, OLO, RBL, RSX, RUSL, RUSS, SCO, SZO, UCO, USL, USO, UWTI
by: Constantin Gurdgiev

Two casualties of the Fed's rate jitter: Oil & Ruble

Source: @Schuldensuehner

Ruble is now nearing August 2015 lows on a continued trend that realigned with oil prices.

And while we are at it, another pairing:

Source: @Schuldensuehner

Note: As of yesterday's closing, Russian CDS 5-year spread was at 308.91 with an implied probability of default of 19.15%. A week ago, same stood at 291.64 with an implied probability of default at 18.26% and at the end of Tuesday, at 305.91 with an implied probability of default at 18.99%.

But as a reminder, watch not only Brent, but also Urals-Brent spread. Hawkish dove of the Fed has less to say on that than Russian energy substitution ongoing in Europe and Turkey via Saudi's and Iranian contracts.