Turmoil Spreads: Ruble Replunges, Crude Craters, Yen Surges, Emerging Markets Tumbling

Submitted by Tyler Durden on 12/16/2014 06:39 -0500

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For those wondering if the CBR's intervention in the Russian FX market with its shocking emergency rate hike to 17% overnight calmed things, the answer is yes... for about two minutes. The USDRUB indeed tumbled nearly 10% to 59 and then promptly blew right back out, the Ruble crashing in panic selling and seemingly without any CBR market interventions, and at last check was freefalling through 72 74, and sending the Russian stock market plummeting by over 15%.

It is so bad, US equity futures which had jumped earlier on hopes of more Chinese intervention following the latest disastrous Chinese PMI print, as well as a French manufacturing PMI beat (don't laugh), are back to unchanged.

The latest rout continues to be driven by the relentless plunge in Brent which also continued crashing overnight to fresh 5 year lows, sliding decidedly under $60 as WTI dropped well under $55 as well. And as we previewed over a month ago, it is not just Russia, but every single petroleum exporting country that is suddenly seeing a currency crisis, and spreading to all EMs with the Indian Rupee weakening the most since 2013, Indonesia lowering the Rupiah's reference rate by the most on record, and so on. Ironically, this happens as the USDJPY is also crashing and dropping moments ago to 116.25, the lowest level since mid-November. At this rate the Fed will have no choice but to intervene, however in the opposite direction, and admit that despite all its best intentions, the US can not decouple from the rest of the world and a rate hike - so very priced in by everyone - is just no going to happen in the coming years (which sadly means that the latest subprime debt driven "recovery" is about to be called off).

A quick look at the oil market where Brent drops for 5th day, falls below $60 for 1st time since July 7, 2009 as the market continues to look for signs that falling prices is crimping production. WTI breaks below $55, drops to lowest since May 6, 2009.  "The race to the bottom continues, we are still not seeing any signs of supply disruption,” says Saxo Bank head of commodity strategy Ole Hansen. “There is very big negative momentum in the mkt and the fact people are starting to talk about breakeven levels of $35-$40 has put up a new red flag for mkts to aim at.... Jan. WTI options expire today and there is quite a lot of open interest ~$55 put strikes, that is probably the key level of potential support today.”

Not helping things was Russia's announcement that it too like the Saudis will not cut production: Russia agrees with OPEC