A massive bid has hit Treasuries after a Bloomberg headline on Russia:
“Russia said to weigh capital controls if net outflows intensify”
They cite “two officials with direct knowledge of the discussions”. From BBG:
Such measures would be preventative and used only if net outflows rise significantly, the people said; they didn’t give a timeline or a level that may force such a move, saying they are looking at all possible scenario.
Capital controls are insane. It basically means that you can’t take your money out of Russia. That’s the kind of thing you don’t want to leak before it happens and that’s the kind of rumor that will spark a rush to the exits before the doors close.
As this talk spreads it could help the euro, which is usually the first stop for Russian money in a rush to get out. The rouble also hit an all-time low against its basket and that will force the central bank to buy euros and dollars to defend the central bank basket.
