Good evening! New trades:
- 2024-02-29 +30 TQQQ @ $59.87
- 2024-03-01 +16 TQQQ @ $61.55
- 2024-03-12 +14 TQQQ @ $59.50
An interesting Tinkoff (TCSG) report came out — I'll publish a short deep-dive on it tomorrow.
The Russian economy is steadily weak; an increasing share of the budget goes to defence spending, and the liquid portion of the NWF will likely last another year, maybe two at most. On USDRUB I expect some weakening, but not extreme.
What's currently driving the rouble:
- Oil price. Still high enough for now.
- Mandatory FX-revenue conversion by exporters. Will the rule be extended? Will exporters get carve-outs? This is essentially the only thread the rouble is hanging on. If it's not extended, or if loopholes appear, the rouble depreciates clearly. If it's lifted entirely, the depreciation could be sharp.
- Rate cuts. Inflation is much higher than the official 7–8% — at least 16% in reality. The CB is signalling improvements and will likely start cutting. This will also pressure the rouble, although foreign carry flows are largely gone.
I see 90–110 as a realistic USDRUB range for this year. If FX-revenue conversion is removed entirely it could overshoot — and the official explanation will be "everyone got rich and bought lots of dollars to travel abroad" 😂.
Holding the position: continue dollar-cost-averaging into TQQQ, no new Russian positions, keeping legacy ones for now.