Geopolitical risks routing Russian assets Rouble pares losses on media report about SWIFT 10-year govt OFZ bond yields touch highest since 2016 Russian stocks near months-long lows MOSCOW, Jan 17 (Reuters) - The rouble"s volatile trend continued on Monday with the currency firming past 76 versus the dollar after weakening towards 77 as geopolitical tensions held sway over Russian assets. The rouble pared losses after German business newspaper Handelsblatt cited sources saying Western governments are no longer considering cutting Russia off from the SWIFT global payments system. By 1524 GMT, the rouble was 0.5% stronger against the dollar at 75.86, swinging in a wide range from 75.61 to 76.80 during the session. It gained 0.5% to 86.52 versus the euro , away from its weakest level since July of 88.14 touched on Friday. read more "Geopolitics dictate the Russian market"s direction," Finam brokerage said in a note. The rouble fell sharply last week as the United States said it feared Russia was preparing a pretext to invade Ukraine if diplomacy failed to meet its objectives. read more The currency suffered its biggest drop in 15 months on Thursday after Russia said the U.S. rejection of Moscow"s key security demands was leading talks into a dead end. read more "Russia"s geopolitical risk is at a local high after the failure of last week"s talks and the bombastic comments that followed – the course of future events is hard to predict, but international investors will likely be hesitant for now," BCS Global Markets said in a note. Russia"s five-year credit default swaps (CDS), which measure the cost of insuring against a default, jumped to 202 bps, a level last seen in April 2020, well above 81 bps seen in early November, data from IHS Markit showed. Yields on Russia"s 10-year benchmark OFZ government bonds, which move inversely to their price, hit their highest since April 2016 of 9.52% , while Ukraine"s dollar-denominated sovereign bonds also slipped into distressed territory. read more Ukraine Russia bonds feeling the heat Ukraine Russia bonds feeling the heat Month-end tax payments may provide support for the rouble but it is unclear if and when markets might recover to levels seen before recent Moscow-Western tensions, analysts said. Russian stocks fell, with the dollar-denominated RTS index (.IRTS)ending the day down 0.7% to 1,474.99. The rouble-based MOEX Russian index (.IMOEX) was 1% lower at 3,560.35. Russia"s equity market was among the weakest in emerging markets in early 2022 in the face of growing political tensions and impending sanctions, said Michael Kart, a partner at VLG Capital investment firm. Shares in Russia"s dominant lender Sberbank (SBER.MM) were down 1.2% after shedding around 4% during the day and touching their lowest since November 2020.