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The Russian Ruble fell around 4% against the USD after the latest sweeping U.S. sanctions from the US. Russia's largest aluminium producer Rusal plunged into crisis leading to panic selling and contagion spread to other companies and bond and FX markets.

USDRUB Daily 4 10 2018

The Russian Ruble Crashes Through Last Octobers Lows

The sanctions follow from a multitude of disgressions from Russia, interference with US elections, cyber-attacks, poisionings in the U.K., Ukraine intervention and Syria. Quite an extensive list there.

Aluminum After Rusal

UPDATED Aluminum 4/11/2018 Chart via Bloomberg

Rusal, Aluminum and China

The Rusal fallout is real, commodity giant Glencore's chief executive Ivan Glasenberg was on their board and within 24 hours has stepped down from the board of Rusal. The largest Russian aluminium producer was plunged into crisis by sweeping US sanctions with the impact of the economic broadside biting under specific sanctions. The latest require US investors to liquidate their holdings of Rusal over the coming month. Panic selling took hold and the contagion spread to other compa nies and also to the bond and FX markets.

Like everything in this blase world the market has been ignoring risk and as such been ignoring new sanctions. Effectively because Russia had been able to live with the sanctions at least that is the impression Russia, through President Putin has had us believe. I devided America seems to not care and all scorn is on the Russian people. The high price price of oil has much to do with this view on sanctions as it has seen the health of Russia's banking system improve.

Perfectly Timed Sanctions on Rusal enable a  concilitory tone from President Xi. In a time of trade wars and U.S. tariffs on China Aluminum and steel and the weekend before China's President Xi is due to speak what better way to send a concillatory message.

Russia's major aluminium produce Rusal was hit by the sanctions and the stock plunged. That's one way to take aluminum off the market and give something for China to work with. At the same time put a little wrench in China and Russia relations.

In a blinded Partisan America the focus on a middle aged porn star trying to revitalise a fading if not, finished career by reneging on a NDA of performing supposed fellatio on U.S. President Trump. The Russian collusion investigation seemingly running at dead ends raided Trump's private solicitor Michael Cohen on grounds of criminal activity.

Chaos is a nice way of describing what is going on here. There are powerful groups pulling which way. It is early days fpr risk on the ruble and the Yuan for that matter . in an opague world there is no clarity or and false information of the true extent of the risks involved,lead to volatilty through low liquidity.

Here is a thought when the initial Ukraine related sanctions were imposed we saw $USDRUB rise 87% between July 2014 and January 2015. By comarison this 4% move represents mild uncertainty so far. What we do know is that the Russian Central Bank will defend the currency and this realisation is likely to limit the fallout for the ruble unless geopolitical tensions escalate further through Syria or other hotspots. Keep an eye on oil as it was a solid 48 hours ahead of this.

About Rusal

UC RUSAL is the world's second largest aluminium company by primary production output (as of 2016). It was the largest until overtaken by China Hongqiao Group in 2015.

UC RUSAL accounts for almost 9% of the world's primary aluminium output and 9% of the world's alumina production. The United Company was formed by the merger of RUSAL (Russkiy alyuminiy), SUAL, and the alumina assets of Glencore, completed in March 2007. According to its own statistics, UC Rusal accounts for 6.2% of the world's primary aluminium output and 6.5% of the world's alumina production, while operating assets in 13 countries over five continents, employing over 61,000 people across its international operations and offices.

The company is incorporated in Jersey, where it has its financial centre, but its headquarters are in Moscow, Russian Federation. UC Rusal is a public limited company and its shares are traded on the Moscow Stock Exchange, Hong Kong Stock Exchange and European Stock Exchange.

Source: Bloomberg, TradersCommunity, Wikipedia

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