05/24/2021 - Yra Harris: To Russia With Love (Or Blinken Blinked)
“It seems like yesterday that Secretary of State Antony Blinken was asserting the U.S. to place even more sanctions on Russia as his boss was calling Vladimir Putin a thug and a murderer. The Russians took advantage of the “good news” and issued a long delayed bond offering and sold close to $2 billion of five- and 10-year debt. Also, if the removal of sanctions is indicative of more positive things to come, watch the ROUBLE, which has closed above the 200-day moving average for the last few days. I have remained long of RSX, the Russian fund for the past few years as it provides a solid yield but is far too heavy with energy/fossil fuel. Plus, the Russian central bank is helmed by one of the best bankers, Elvira Nabiullina.
The Biden administration is courting Russia for either an attempt to get greater support for a new Iran deal or, as some of NOTES readers have suggested, trying to move Russia a bit further away fro China. These are good conjectures as is also the idea that the U.S. is trying to repair some of the ill will with Germany created by the Trump administration. Given the way the DAX closed against the SPOOS it may be that repairing relations through removing sanctions on Russia will help generate greater economic activity in Germany. The S&P/DAX closed below the 200-day moving average.”
