wealth management
Dear clients,
The year 2025 proved that high real rates work. Despite the Bank of Russia cutting the key interest rate gradually, the spread between the nominal and real rates persisted and supported the attractiveness of ruble bonds. We have consistently recommended this asset class. That said, many issuers with high leverage are facing additional pressure, and even some traditionally reliable names have moved closer to financially distressed levels as debt is unforgiving of continuing business weakness.
The exceptionally strong ruble limited the potential of foreign currency bonds in 2025. However, their yields in US dollars still remain high in real terms and in the view of the likely ruble weakening – this fat pitch extends into 2026.
The Russian stock market came short of expectations in 2025: high interest rates, low oil prices, the appeal of alternative assets, and a strong ruble pushed back against the Moscow Exchange Index, of which the commodity sector accounts for over 50%. The 2026 outlook is more positive, but premature decisions should be avoided.
In the infoglut environment, the key to success is to focus on fundamental trends, and here are our top 10 provocative forecasts for 2026:
- The ruble weakening by 30% against the US dollar
With oil prices falling below $50/bbl, FX bonds will significantly outperform ruble yields. - The Central Bank's no-response to accelerating inflation
The ruble weakening and VAT increase will bring back inflation, but nominal rates will remain flat, putting pressure on real rates. - Russia's agricultural sector growing by 40%
Exports to Asia and food security will make the sector an outperformer. - Oil below $40/bbl in Q1 2026
The collapse of OPEC+ and the return of Venezuela to the market will put pressure on heavy crude spreads. - Russian budget deficit >3% of GDP
Growth of general-purpose and social spending, and tax hikes. - The crisis in China curbing Russian exports by 20%
Pressure on the ruble and bulk commodities. - Gold remaining above $4,000/oz, but no significant growth in 2026
Geopolitics and inflation remain elevated but no major new drivers. - Defaults of top 5 issuers in some specific sectors of the Russian bond market
High interest rates will expose vulnerabilities even among the leaders. - Global debt crisis
US + Europe – rates will blow up $300 trillion in debt. Short-term rates will fall, but long-term rates will rise, exposing vulnerabilities even among the leaders. The DXY index will return to above 100. - Copper +50%, aluminum +40%, uranium +60%, lithium +70%
supply shortages and demand for green energy will outpace gold (best commodity bets of 2026).
Our forecasts are outside the consensus, yet they are based on current trends. We advise disregarding the information noise and focusing on asymmetric opportunities.
Best wishes for 2026,
