Quotes from Commerzbank Corporates & Markets:
-RUB, UAH: Today's surprise visit by Mrs Merkel and Mr Hollande to Moscow is a make or break event. According to media, the French and German leaders plan to make a proposal to President Putin for an autonomous region in eastern Ukraine run by the separatists.
-Meanwhile, according to Russian officials, discussions are at last being held for a possible UN peacekeeping force to be put in place to safeguard the buffer zone between Ukrainian and separatist forces. An agreement at today's summit would be a major supportive for the RUB and the UAH, while the opposite is true if there is no agreement. Indeed, failure to reach peace would mean a serious escalation of the conflict.
-The National Bank of Ukraine let the UAH go yesterday, while hiking rates by 550bp to 19.5%. We see rate changes having little effect on either the RUB or UAH as the main driver remains the confidence that households and corporates have in their respective currencies, and in turn the duration of the conflict in eastern Ukraine.