Commerzbank's FX Research report by Tatha Ghose discusses the outlook for the Ruble amidst ongoing geopolitical tensions and sanctions. The report highlights a potential positive scenario if a peace deal between Russia and Ukraine is reached, which could lead to the lifting of some sanctions. However, the overall economic outlook remains challenging, with signs of stress and a weaker currency forecasted in the absence of significant geopolitical changes.

Outlook for the Ruble

"All said, one positive scenario is emerging, even if not for the right reasons. The US administration has been trying to negotiate a peace deal between Russia and Ukraine. The negotiations are reportedly stuck at a complex juncture involving territorial surrender."

"It is not our base-case that a solution can be found around this quagmire soon. Nevertheless, if a solution were to somehow be found, we may assume that some major sanctions on Russia would be lifted."

"In conclusion, a positive scenario regarding sanctions and frozen assets may now be priced-in with some probability. A peace treaty is not our base-case for the near-term. But in the event that a solution is found, the rouble would appreciate considerably from current levels."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)