The Russian ruble has fallen to its lowest level since March 2022 amid concerns that new US sanctions will further restrict trade channels. The ruble exceeding 100 against the dollar is considered a critical threshold in terms of economic confidence. The USD/RUB exchange rate has exceeded this critical threshold by reaching 110.93.

The US’s new sanctions last week against Russian banks that play an important role in international payments have increased pressure on the ruble. The targeting of Gazprombank in particular is putting Russia’s gas export revenues at risk. In response to the negative signals from the ruble, the Central Bank of Russia has taken action to control fluctuations in the foreign exchange market. The bank announced that it will stop foreign exchange purchases made within the framework of budget rules as of November 28 until the end of the year.

Kiril Tremasov, Director of the Financial Policy Department of the Central Bank of Russia, said that inflation could exceed the targeted 8.5% by the end of the year and that an increase in the policy rate will be considered in December.

European Central Bank (ECB) President Christine Lagarde said that the European Union should focus on negotiation and cooperation rather than direct retaliation against possible new tariffs imposed by the US.

In an interview with the Financial Times, Lagarde said that the scope of the tariffs and the basis for their implementation created uncertainty. Lagarde emphasized that it would be a more appropriate strategy for the EU to be open to negotiations in this process, and said, “Broad and indiscriminate tariffs and targeted tariffs produce different results.” Lagarde stated that the European Commission was preparing for such developments and said, “Sitting at the table with the US and seeing how we can work together is a better scenario than a retaliatory process where no one wins.”

Lagarde stated that the European economy has not been able to close the gap with the US in the last 30 years and that they have missed the transformative effect of the information revolution. Lagarde stated that this situation has caused Europe to lose its competitive power in certain areas and emphasized that this gap continues to grow. Lagarde’s statements reveal Europe’s desire to resolve trade tensions with the US through negotiations. Emphasizing that trade wars will harm the global economy, Lagarde states that problems can be overcome through cooperation and strategic dialogue.

US President-elect Donald Trump’s nomination of Scott Bessent as Treasury Secretary has somewhat slowed down the upward trend in the dollar. The dollar index, which had been above 108 the week of November 18, retreated to 105 last week.

Expectations that Scott Bessent would adopt a more gradual approach to tariffs and aim to control the budget deficit created a positive atmosphere in the markets. In recent weeks, the dollar has recorded a significant increase due to expectations for Trump’s trade tariffs and growth-focused fiscal policies, pushing the euro to its lowest level in two years and the Swiss franc to its weakest level since July.

However, there are those who think that this relaxation is temporary. Trump announced that he will impose 25% tariffs on Mexico and Canada, which are the main export markets of the US. Despite being the world’s largest oil producer, the US imports large amounts of crude oil to be processed in refineries. Refineries in the northern US in particular are dependent on heavy crude oil imported from Canada. In addition, major players in the automotive sector in Mexico are working in the US market.

Following Trump's statement, the Mexican peso lost 2.3% of its value against the US dollar, while the Canadian dollar fell to its lowest level in the last four years.

Israel announced that it has approved a 60-day ceasefire agreement with Hezbollah.

In a statement following the cabinet meeting, Netanyahu stated that the duration of the ceasefire would depend on developments on the ground. This critical step is considered an important turning point in terms of ending the clashes between Israel and Hezbollah. US President Joe Biden stated that the Lebanese army and security forces would be deployed in the southern border regions and that control of the country's territory would be ensured during the 60-day ceasefire.

On November 27 and 28, when the ceasefire agreement came into effect, the Lebanese army made statements that Israel had violated the ceasefire. The Lebanese army's statement on the X platform said, "Enemy Israel has violated the agreement several times by targeting Lebanese territory with air violations and various weapons."

The most prominent news of the week in the automotive sector was the news that I learned about BYD's preparations for 2025.

BYD, China's largest electric vehicle (EV) manufacturer, called on its suppliers to reduce their prices by 10% in order to reduce costs at a time when its competition with Tesla is heating up. In an email spread on social media, BYD's Executive Vice President He Zhiqi asked suppliers to submit their offers by December 15 and implement price reductions starting in 2025. "2025 will be the year of a great final battle for the EV market. We must be serious about reducing costs to increase BYD's competitiveness," Zhiqi said, emphasizing the importance of the price reduction.

BYD's payment terms to its suppliers increased to an average of 144 days in the first nine months of 2024, compared to 124 days a year ago. Price competition in the Chinese EV market accelerated with Tesla's aggressive price reductions initiated in late 2022. Tesla earlier this week cut the price of its most popular model in China, the Model Y, by 10,000 yuan (about $1,379), taking it down 4% to 239,900 yuan.

On the agricultural commodity front, coffee prices continue to rise on supply concerns.

Coffee prices have risen to their highest level in 50 years amid growing concerns about global supply shortages and uncertainty over the impact of new EU deforestation laws.

In New York, premium arabica coffee futures rose 4.7% to $3.23 per pound, the highest since 1977. The price increase this year has exceeded 70%. In London, cheaper robusta coffee futures rose 7.7% to $5,507 per tonne.

That’s nearly double the level at the start of the year.

The information, comments and recommendations contained herein are not within the scope of investment consultancy. Investment consultancy services are provided within the framework of the investment consultancy agreement to be signed between brokerage firms, portfolio management companies, banks that do not accept deposits and customers. The comments in this article are only my personal comments and these comments may not be appropriate for your financial situation and risk return. For this reason, investments should not be made based on the information and comments in my articles.