China Holds Loan Prime Rates Steady in January as Market Expectations Align 
Indonesia Surprises Markets with Interest Rate Cut Amid Currency Pressure 
New York Fed President John Williams Signals Rate Hold as Economy Seen Strong in 2026 
Japan Declines Comment on BOJ’s Absence From Global Support Statement for Fed Chair Powell. Source: Asturio Cantabrio, CC BY-SA 4.0, via Wikimedia Commons 
UBS Predicts Potential Fed Rate Cut Amid Strong US Economic Data 
Moody's Upgrades Argentina's Credit Rating Amid Economic Reforms 
Goldman Predicts 50% Odds of 10% U.S. Tariff on Copper by Q1 Close 
Mexico's Undervalued Equity Market Offers Long-Term Investment Potential 
Bank of Canada Holds Interest Rate at 2.25% Amid Trade and Global Uncertainty 
RBA Deputy Governor Says November Inflation Slowdown Helpful but Still Above Target 
Wall Street Analysts Weigh in on Latest NFP Data 
Bank of Korea Expected to Hold Interest Rates as Weak Won Limits Policy Easing 
Bank of England Expected to Hold Interest Rates at 3.75% as Inflation Remains Elevated 
U.S. Stocks vs. Bonds: Are Diverging Valuations Signaling a Shift? 
Federal Reserve Faces Subpoena Delay Amid Investigation Into Chair Jerome Powell 
Trump’s "Shock and Awe" Agenda: Executive Orders from Day One 
Moldova Criticizes Russia Amid Transdniestria Energy Crisis 
As stated in our previous post, CBR’s indication of hikes has cushioned ruble depreciation.
Resumption of FX purchases will prove bearish for RUB, in our view. The CBR announced the resumption of FX purchases from January 15th. This is likely to weigh meaningfully on RUB, in our view, with the current account support much smaller.
The ruble rallied through January, and USDRUB briefly fell near the 66 mark last week. But this rally stopped after CBR stepped up FX purchases: from 1 February, CBR will mop up additional 18% dollars from the market than what they have been doing in recent months. This increased rate of purchase will make up for the period August-December 2018 when FX purchases were suspended because the oil price came under pressure; the increased monthly volume will continue for 36 months assuming that calm conditions will prevail.
Over this period, the additional purchases will total $32bn. The volume is not negligible, of course, but in our view, the currency will be more affected by whether or not CBR continues to hike rates this month. Beyond the initial market reaction following the announcement, we do not anticipate the FX purchases to have an effect on USDRUB.
Options Trade Tips (USDRUB): At spot reference: 66.056 levels, we maintain our 3m 1x1 USDRUB (65/71) call spread. We may have been a bit early with this trade as the resumption of purchases was now announced only for January 15th, after the expiry of our option. Yet, amid global EM risks and negative RUB seasonality around the year-end, we still see a good chance RUB will weaken in anticipation of the budget rule headwind within the remaining maturity of the trade. Courtesy: JPM & Commerzbank
Currency Strength Index: FxWirePro's hourly USD is inching at -113 (which is bearish), while articulating (at 13:31 GMT).
For more details on the index, please refer below weblink: http://www.fxwirepro.com/currencyindex
