With oil prices crashing [9], as various OPEC members (cough Saudi Arabia cough [10]) turn the screws on each other [11], we thought (after showing the US domestic pain) [12] the following chart from The Economist would provide more context for which nations are feeling the most (and least) pain...
[13]
h/t @TheEconomist via @RANsquawk
So it appears Russia is now in the red.
But, And as Goldman Sachs notes, despite the great efforts of the Sauds and Obamas to bring down the House Of Putin, Russian bond and equity prices, and the fiscal and external balances, are now less vulnerable to oil price shocks:
we conclude that the recent decline in oil prices is unlikely to have been the main factor driving Russian asset prices given that:
(i) Russian assets have significantly underperformed those of other commodity-linked economies;
(ii) high-frequency correlations between Russian asset prices and the oil price had fallen to close to zero in the recent past;
(iii) with the Ruble now being flexible and the correlation between capital outflows and the oil price being highly positive, the oil price should matter less for the real economy than it did in the past.
With the exchange rate being flexible, the Russian authorities will be able to use monetary policy in particular but fiscal policy as well to counteract the impact of the terms of trade on growth. This should lower the correlation between bond prices and equity prices in times of sharp moves of oil prices.
