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Rosneft "Radical" Sanctions Retaliation Proposal Sends Russian Bonds, Currency Plunging

10Y Russian bond yields have broken above 10%, trading at the highest yields since 2009 as the Ruble plunges once again to fresh record lows against the dollar. These significant moves come on the heels of two notable headlines overnight. First, German exports to Russia slumped 26.3% YoY in August (down a stunning 16.6% year-to-date with vehicle exports plunging 27.7%) as sanctions batter bilateral trade. Secondly, Rosneft has proposed what is being described as "radical" reactions to the West's sanctions, which the Kremlin has (for now) denied.

Bonds and Ruble are tumbling...

 

As German exports to Russia collapsed (via Xinhua)

German exports to Russia dropped significantly in August as the Ukraine crisis hit their bilateral trade, official data showed on Wednesday.

 

In August, German exporters delivered goods worth 2.3 billion euros (about 2.9 billion U.S. dollars) to Russia, the German Federal Statistical Office (Destatis) said. Compared to the same month of previous year, the exports slumped by 26.3 percent.

 

From January to August, German exports to Russia fell by 16.6 percent year on year. Vehicles and motor vehicle products was hit the worst, suffering a decline of 27.3 percent.

 

The drops showed a deteriorating bilateral trade between the two countries. From 2010 to 2012, German exports to Russia enjoyed high growth every year. In 2011, the exports rose by 30.8 percent.

And Rosneft unveils new "radical" sanctions (via Interfax)...

Russian presidential aide Andrei Belousov said he had received proposals from Rosneft on how to react to Western sanctions, and these proposals are being reviewed.

 

"I would say that the radicalism of the proposals for now exceeds the sharpness of today's situation," Belousov told journalists on Wednesday.

 

"We are in the process of studying [the proposals]," he said.

 

Commenting on Rosneft's proposals, Economic Development Minister Alexei Ulyukayev said: "It's a very complex document, complexly formulated. I don't think it is grounds for making any decisions."

The Kremlin has denied the rumor...

Russian presidential spokesman Dmitry Peskov denied on Wednesday reports that Russian oil major Rosneft allegedly prepared proposals on new retaliatory sanctions.

 

“This absolutely does not correspond to reality, this information that Rosneft allegedly prepared proposals of anti-sanctions nature,” Peskov said.

 

“Preparations of any proposals are out of the question,” Peskov said. “This is not true that there are some proposals from Rosneft.”

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It seems someone is really upset as Sechin news just reported: Rosneft to file lawsuit against Kommersant daily - the entity that broke the story.