Russian Relief Rally As US Sanctions List "Better Than Expected"

While Jay Carney and the White House continue to press their "sell" recommendation on Russian assets, it appears the market is buying the news (after selling the rumor). Russian stocks are ripping higher on "better than expected" sanctions and the Ruble is strengthening notably... So given that the market is signaling these sanctions are clearly weaker than expected,  we should certainly not expect any Russia de-escalation soon.

 

Russian Stocks soaring...

 

Ruble strengthening notably against the USD...

And this is what Jack Lew had to say...

Statement Of Treasury Secretary Jacob J. Lew, 4/28/2014
 
Russia’s dangerous and inflammatory actions against Ukraine are illegal and illegitimate.  Since Russia has refused to follow through on its Geneva commitments, today the United States is following through on its statements – we are imposing additional costs against Russia, including sanctions on individuals in the Russian leadership’s inner circle and 17 entities closely linked to previously sanctioned members of the inner circle.  Today’s targeted actions, taken in close coordination with the EU, will increase the impact we have already begun to see on Russia’s own economy as a result of Russia's actions in Ukraine and from U.S. and international sanctions.

Russian economic growth forecasts have dropped sharply, capital flight has accelerated and higher borrowing costs reflect declining confidence in the market outlook.  Our goal continues to be for Russia to deescalate the situation so that additional sanctions are not needed. However, we are resolved to continue to work with our international partners and take the steps required, including action against individuals and entities in specific sectors, if Russia continues to press forward.”

 

Charts: Bloomberg