Ruble Tumbles, Russian CDS Jump After Full Text Of "Crushing Sanctions" Bill Leaks

Add Russia to the list of emerging market nations in turmoil.

The ruble tumbled, sliding to the lowest level since November 2016, Russian CDS blew out and Russian stock and bond markets plunged after Russian Kommersant newspaper published the full text of the US bill which seeks to impose "crushing sanctions" on Moscow for election meddling.

The ruble dropped more than 2%, sliding as low as 65 per dollar, and breaking out of a range it’s traded in since April, after traders had a chance to read the full text of the sanctions draft introduced last week by a bipartisan group of legislators.

The liquidation panic set in after it was revealed that the bill includes proposals to sanction new sovereign debt and banking transactions, effectively a repeat of the US sanctions imposed on Russia in 2014 following the Ukraine coup, which sent the Ruble plunging from the mid-30s to below 70 in the span of a few months.

"The Kommersant publication was the straw that broke the camel’s back," said Nordea Bank analyst Denis Davydov. “It’s important to be able to read and assess the actual bill."

As Bloomberg notes, traders are particularly concerned by a clause that calls for prohibiting "all transactions in all property and interests in property" of some of the country’s largest lenders. The listed banks, Sberbank, VTB Bank, Gazprombank, Promsvyazbank, Rosselkhozbank and Vnesheconombank all saw their stocks tumble in response.

The draft also includes Bank of Moscow, which was merged into VTB in 2016, while Vnesheconombank is listed twice in the text, without explanation.

While the yield on Russian 10-year government bonds jumped 16bps to 8.04%, the highest level in more than a year, Russian CDS saw the biggest pain, blowing out from below 140bps to as high as 150bps in intraday trading, a two month high.

Stocks were not spared either with the benchmark Russian stock index sliding 0.8%.

For now, no immediate action will follow with Congress on summer recess in September, "leaving room for more market jitters through the end of the month."

The silver lining: with President Trump calling for closer ties with Russia, and the U.S. Treasury warning earlier this year against sanctioning the sovereign debt market, Bloomberg's Benjamin Dow notes that "a lot of stars will have to align for these scenarios to play out and actually lead to sanctions -- and this reality can give Russian assets relief once traders get beyond the knee-jerk fear."

Comments

gdpetti Yellow_Snow Wed, 08/08/2018 - 11:07 Permalink

Most likely just the usual market 'pump and dump' schemes.... remember that their establishment is still nearly half 'Atlantic Integrationalists'.... Western friendly types like the PM....

But, doesn't a cheaper currency assist Putin drive to pump up their industry, agriculture etc? And is this a move in congruence with China's currency pattern? And seeing that Russia and the USA don't do much business together... this seems another nail in the coffin to push the EU to either fold or raise their bet... stay or go.... in the  American led Western empire... as it's obviously on its last legs... and do they want to keep their wagons all hitched to it as it goes over the cliff?

In reply to by Yellow_Snow

RationalLuddite Pinto Currency Wed, 08/08/2018 - 13:06 Permalink

And your actual evidence or plausible connections that the State, the security services or the dreaded Mr Putin were in anyway involved ? And your evidence that the State would have or did gain advange? 

You're a innuendo merchant? Or just an infantalised mental slave who only needs the western MSM secular priests, Big Daddy, to tell you something about the big bad boogie man and you believe them despite their track record as demonstrable brazen pathological serial liars?

 

Please - do show us all the investigative reporting that led your brilliant mind to this above innuendo 

In reply to by Pinto Currency

are we there yet Pinto Currency Wed, 08/08/2018 - 15:26 Permalink

When I lecture in Sochi and Moscow Russia and need to exchange currency in banks, I was surprised that the banks promote and offer sales of Gold coins to its citizens. Also I noticed no GMO foods, the restraunts and eateries have more intelligent presentation of food. Nearly always the food servers are much more intelligent looking, but since Russians restaurant tipping is usually stingy or absent, often the service is varied from poor to superior. Russian walk a great deal more than we do, and obesity is very rare, but excess alcohol drinking is not uncommon and is well tolerated. Russians love American music and movies.

In reply to by Pinto Currency

richsob are we there yet Wed, 08/08/2018 - 11:30 Permalink

I never stay in hotels when I visit Russia.  I always rent an apartment and get my food from the local restaurants and grocery stores.  It takes a little extra effort but it's worth the bother to be around "real" Russians.  You would be surprised how often I end up being invited to parties, family gatherings, etc. and everything feels very friendly even when I am discussing/arguing politics with my new Russian friends.  On one thing we always seem to agree: our politicians cause the most trouble when the average Joe/Ivan just wants to enjoy life.

In reply to by are we there yet

Albertarocks gatorengineer Wed, 08/08/2018 - 09:46 Permalink

The Russians did "nothing".  That lie has been thoroughly debunked and declared to be nonsense.  Yet this bullshit excuse lives on as a reason to further agitate Russia.  It's the warmongers of the world just continuing to do their evil best to destroy the world as we know it... nothing less.  They offer absolutely nothing to humanity except pain and destruction.  BANKERS.

In reply to by gatorengineer

rwe2late gatorengineer Wed, 08/08/2018 - 10:33 Permalink

 Answer what they did (the real, usually unspoken "transgressions"):

Russia "influenced" US politics by spreading factual info on RussiaToday (whose founder 'suicided' by repeatedly beating himself in a Washington DC hotel).

Russia refused ,backed by the wishes of over 90% of Crimeans, to hand over Russia's vital Black Sea port to the hostile Russophobic Kiev coup government installed by the USA. Furthermore, Russia prevents the Kiev government from sending, with US backing, military forces to subdue (massacre) the 90% ethnic Russian Crimean population.

Russia thwarted ISIS and other US-backed illegal terrorist 'freedom fighters' from overthrowing the Assad government in Syria, despite the legality of Russian presence at the invitation of the Syrian government, and the illegality of the US invading forces.

Russia sells fuel to Western Europe cheaper than US companies offer.

 

[There's more, but you get the idea]

In reply to by gatorengineer

resistedliving gatorengineer Wed, 08/08/2018 - 10:59 Permalink

Here's a primer Engineer and Upvoters:

1.  Corrupted tRumpf's US National Security nominee Gen. Flynn who 'forgot' to declare he took money from Russia and

over $500K from that friendly Turkish guy Erdogan and pled guilty to lying about it.

2.  Corrupted tRumpfs campaign chair offered to give Russia 'inside information' on tRumpfs campaign strategy and Russia Policy and help remove Russia sanctions our Congress voted

3.  tRumpf took videoed golden showers in Moscow and the tape is w/ Putin (this last one is OK in my book except Putin having the tape)

4.  Borrowed and laundered tens of millions of Russian money via TRUMP SOHO, TRUMP TORONTO, TRUMP Hotels generally.

Question:  if Obama did any of the above, would you still profess such innocence?  Hillary no, but she's not the POTUS

 

In reply to by gatorengineer

snblitz gatorengineer Wed, 08/08/2018 - 14:52 Permalink

Can anyone point me to a description of what the Russians did exactly? 

Just open your eyes.  The Russians did effectively nothing.

On the other hand the foreign owned MSM is affecting US elections every minute of every day out in the open for everyone to see.

Now the tech firms have joined in by shutting down one side of the political debate.

In reply to by gatorengineer

shortonoil Ghost of PartysOver Wed, 08/08/2018 - 09:57 Permalink

Agree totally. If I am reading Trump correctly (???) he won't sign the bill even if it gets through congress; which I doubt. The US will need a good relationship with Russia as the collapse in the EM deepens. But the DS is now in frantic mode! If relations with Russia improve they loss much of the justification for their $700 billion a year war spending policy, which the US will not be able to afford for much longer, anyhow. Let's hope this insanity dies on the floor of the Senate.

In reply to by Ghost of PartysOver

Ecclesia Militans PitBullsRule Wed, 08/08/2018 - 09:47 Permalink

Go to a remote part of the world - real "Heart of Darkness" place like central Africa far from roads and infrastructure - and hike along until you find a small clearing in the middle of nowhere with a kiosk probably operated by some Indian or Lebanese guy.

Offer to buy something with a Ruble.  Or a Yuan, a Peso, a Lira, or even the local currency.  Then offer a Dollar.

See what happens.

In reply to by PitBullsRule

PitBullsRule Squid Viscous Wed, 08/08/2018 - 09:43 Permalink

All you guys have is oil, you don't produce anything else of value. If you made something useful that sold on the world market, maybe somebody would want some fucking "Rubles". I've never seen a fucking "ruble" in my life, and I've seen a lot of valuable things, nobody in my whole life has asked me to trade for a "ruble".

Seriously, what the fuck is wrong with you Russians? Why don't you get a clue and become a normal country that acts like human beings? Then maybe somebody will want your fucking "Rubles".

In reply to by Squid Viscous

TomNext PitBullsRule Wed, 08/08/2018 - 10:45 Permalink

Typical american arrogant idiot that knows nothing of the world and has seen nothing of it. I always have to laugh when I watch your science fiction movies like Star Wars where you can fly across the galaxy and do everything in space, but in reality you americans can do NOTHING, not even bring an astronaut into orbit. You have to use the Russian taxi to get up there because they can.

Lets look at typical so called american product like a Harley Davidson motorcycle. In reality very little is "made in USA". Since 30 years it has a German Porsche engine in it, because you can't build a reliable motor.

The discrepancy how you display yourself and what you can actually do could not be greater. You are full of shit and lies. They only thing you can do well is bomb and destroy countries that can't defend themselves. And you haven’t won a war since over 100 years.

Yes, the II WW was won by the Russians, if you know the truth. They where up against 230 German division in the east, beat the crap out of them, and you only had 23 in the West that you could hardly manage, so thats 10 to 1. Also the Japanese army of 1,5 million was beaten by the Russians and they where the first in Korea ready to invade Japan.

You know fuck all about the real history and believe lies that they teach you.

Then, so Russia produces nothing except oil? What about the rocket engines that they sell to you, because you are incapable to build any. Your rockets to bring up satellites need Russian engines otherwise they stay on the ground. Since the German rocket scientist that you kidnapped have died out you can do fuck all in space.

You have never seen a Ruble? Well that shows that you are an ignorant self-centred red neck who lives in the woods and never been overseas. The Russian currency is used by nearly half a billion people in more then 20 countries, not only in Russia, but in the former republics of the Soviet Union and elsewhere.

Russia is a normal country, more normal then your fucking shit hole, where millions live on the streets, in tents and in their cars. Why don't you visit Russia like the millions of football fans that just enjoyed the great FIFA World-championship and see for your self what a great country it is and friendly people they are, before opening your mouth?

In reply to by PitBullsRule

Uchtdorf TomNext Wed, 08/08/2018 - 11:45 Permalink

Good post. I would just add a bit of info to your comments on Russia winning WWII. There is an old book, From Major Jordan's Diaries, by Major George R. Jordan, in which he details all the aid given by the US to Russia during the war. Included was weapons-grade uranium. Anyway, Russia might have supplied the manpower (and Stalin's disregard of human life could be the topic of another discussion), but the US shipments of guns, ammo, tanks, etc. to Russia made the difference in determining the ultimate winner.

Of course, Prescott Bush, father and grandfather of traitorous US presidents was trading with the 3rd Reich so a lot of treason was happening on both sides of that horrible war. The scoreboard said: Average People - 0; MIC - 100. The people lose.

In reply to by TomNext