MAS Holds Monetary Policy Steady as Strong Growth Raises Inflation Risks 
ECB’s Cipollone Backs Digital Euro as Europe Pushes for Payment System Independence 
Bank of America Posts Strong Q4 2024 Results, Shares Rise 
New York Fed President John Williams Signals Rate Hold as Economy Seen Strong in 2026 
Bank of Japan Signals Cautious Path Toward Further Rate Hikes Amid Yen Weakness 
Urban studies: Doing research when every city is different 
Trump’s "Shock and Awe" Agenda: Executive Orders from Day One 
US Gas Market Poised for Supercycle: Bernstein Analysts 
U.S. Treasury Yields Expected to Decline Amid Cooling Economic Pressures 
Energy Sector Outlook 2025: AI's Role and Market Dynamics 
Federal Reserve Faces Subpoena Delay Amid Investigation Into Chair Jerome Powell 
RBA Expected to Raise Interest Rates by 25 Basis Points in February, ANZ Forecast Says 
China Holds Loan Prime Rates Steady in January as Market Expectations Align 
Bank of Canada Holds Interest Rate at 2.25% Amid Trade and Global Uncertainty 
The Russian central bank hiked rates by 25bps on Friday, in line with our expectations. While the median consensus had been for no change, the market was heavily split with neither side having a strong conviction - hence, the final outcome did not affect the ruble. Our own reasoning had been that CBR would not want to fall too far behind the Fed in raising rates. What was slightly surprising from the new projections and statement is that CBR maintained a 5.0%-5.5% inflation forecast for end-2019 and, in fact, see upside risk to this forecast. This is despite the oil price no longer trending up, as had been the case a quarter ago, but having fallen considerably since October.
Our own inflation forecast for end- 2019 is a substantially weaker 2.8% - and from this lower level, one can reasonably see upside risk in the event that the US implement unexpectedly harsh sanctions next year. Despite the hawkish rhetoric and CBR saying that it may need to hike again depending on inflation performance relative to forecast, our base-case is that no further rate hike will be needed in this cycle. We see inflation moderating noticeably through H2 2019. Since Russia's real interest rate would rise as a result, the RUB is likely to hold well against the USD. Hence, we see USDRUB sideways at 67.00 by end-2019.
Trade tips: At spot reference: 66.521 levels, on hedging grounds, 1m1w USDRUB 1x1 put spread (67.057/64.14) is advocated.
On trading grounds, we advocate initiating strangle shorts strategy: As you could observe the swings in the major trend have been oscillating between Major trend wedged between 70.637 and 64.852 from last 3-4 months levels, it is wise to deploy (0.5%) out-of-the-money call and (0.5%) out-of-the-money put options of 1m tenor. The strategy can be executed at the net credit and certain yields would be derived in the form of initial premium received as long as the underlying spot FX remains between OTM strikes on the expiration.Courtesy: Commerzbank
Currency Strength Index: FxWirePro's hourly USD spot index is inching towards 6 levels (which is neutral), while articulating (at 13:47 GMT).
For more details on the index, please refer below weblink: http://www.fxwirepro.com/currencyindex
