China will soon allow Russian energy companies to access its domestic bond market. In a recent meeting in Guangzhou, Chinese regulators pledged support for “panda bonds” issued in renminbi. This will be the first such deal from Russia since the invasion of Ukraine and the first corporate bond issuance since Rusal in 2017. These discussions took place during President Putin’s recent trip to Beijing, where they also advanced a major energy deal, including the Power of Siberia 2 pipeline between Gazprom and China.

Impact On Currency Markets

We can expect more stability and increased trading volume in the renminbi-ruble (CNY/RUB) currency pair. The bond issuance will create a new way to move money outside the dollar system. Since bilateral trade settlements in national currencies surpassed 95% in early 2025, this step further protects the currency pairing from Western financial pressures. Traders might explore long-volatility strategies on USD/CNY, as this move away from the dollar creates new uncertainties for the greenback. The Power of Siberia 2 pipeline agreement indicates a significant change in energy flows across Eurasia, redirecting large gas volumes away from Europe. Since the Ukraine war began in 2022, Russian gas exports to Europe have dropped from over 150 billion cubic meters per year to less than 30 bcm. This new 50 bcm pipeline to China will put more pressure on European gas prices (TTF) compared to Asian prices (JKM), making calendar spread options an intriguing strategy. This financial integration allows China to obtain discounted Russian crude, such as the ESPO blend, which has been cheaper than Brent crude since 2022. This stable purchase arrangement in a friendly currency may limit regional oil prices compared to global benchmarks. We see potential in trading derivatives that speculate on a widening gap between Brent crude and the Shanghai INE crude oil futures contract.

Significance Of Panda Bonds

The reopening of the panda bond market to Russian companies is much more important now than it was in 2017 when Rusal last issued bonds. Before 2022, the goal was diversification; now, it’s about building a financial system that can withstand sanctions. This indicates that the effects on currency and commodity derivatives will be deeper and more lasting than previous cooperation efforts. Create your live VT Markets account and start trading now.

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