Ruble
Mikhail Vasiliev, chief analyst at Sovcombank:
– In the coming week, we expect a moderate weakening of the ruble. We believe that the ruble will trade in the range of 90-95 per dollar, 99-105 per euro, 12.6-13.3 per yuan.
The demand for the currency continues to exceed its supply, which does not allow the ruble to strengthen, despite the increase in oil prices.
Last week the July tax period ended, when exporters were actively selling currency for budget settlements, and until the last week of August, the ruble lost this support factor.
In favor of the ruble is the increase in oil prices on world markets. Over the past four weeks, Brent oil prices have risen from $74 to $84 per barrel.
Likewise, foreign exchange interventions in favor of the ruble are maintained within the framework of the budgetary rule. The Ministry of Finance sells yuan daily in the amount of 1.7 billion rubles. to make up shortfalls in oil and gas budget revenues. In addition, from August 1, the Bank of Russia will additionally sell yuan from reserves for 2.3 billion rubles. per day in connection with the use of NWF funds.
However, these factors are not enough to satisfy the increased demand for foreign currency for import purchases, for summer vacations abroad, as well as the demand for foreign currency due to geopolitical, budgetary, and inflationary risks.
Oil
Marina Nikishova, chief economist at Zenit Bank:
– Brent oil prices continue with the upward trend. Despite dollar growth amid strong US macroeconomic data releases, initiative in the oil sector remains on the buyers’ side. Investor sentiment was also influenced by inflation statistics in developed countries, suggesting that the recession in the global economy will apparently take place under a “mild” scenario. The latest rhetoric from the US Federal Reserve after raising the rate by 25 basis points in July turned out to be not so harsh, the market expects a pause.
The engine of growth in oil prices is also the new measures to support the Chinese economy. Beijing plans to stimulate domestic demand in the auto sector by raising quotas for car sales, boosting household income, business investment and announced new support measures for developers.
Continued oil purchases are also taking place against the backdrop of investor expectations of reduced supplies from OPEC+ countries. OPEC raised its 2023 oil demand forecast to 102 million barrels a day, tying the revision to an improving outlook for the Chinese economy, where demand remains strong. Saudi Arabia announced the extension of a voluntary cut in oil production by 1 million barrels per day in August. For the second time since the beginning of the year, Russia has also announced a further reduction. The downtrend has been broken, and in the third quarter of 2023, oil prices will shift to the range of $82-90 per barrel and remain in this corridor until the end of the year.
Exchange
Vasily Karpunin, Head of the Information and Analytical Content Department, BCS World of Investments:
– The Russian stock market is now close to yearly highs. The Moscow Stock Exchange Index has passed the 3000 mark. Next week fluctuations around 2950-3050 points are possible.
In the near future, oil companies, which have a significant weight in the Moscow Stock Exchange index, may play an important role. Positive outlook on Tatneft and LUKOIL. Corporate reporting season is one of the key events in the market in the coming week and generally throughout August. This often becomes a strong driver of stock performance. Additionally, several companies may recommend dividends for the first half of 2023.
An important event will be that next week the trading of shares on the Moscow Stock Exchange will switch to the T+1 mode from the T+2 mode. In other words, the delivery of the shares and the payment for them will now take place not in two business days, but in one.
In the currency market, the USD/RUB rate has not yet been able to consolidate below 90. Several attempts were made in the previous week, but the quotes continued to bounce. With a safer break through the 90 ruble mark, for example, with a decline below 89.6-89.8 rubles, a local acceleration of the descending wave is possible. In favor of such a scenario in August, the raw material factor indicates, namely the increase in oil prices, which with a lag affect the entry of foreign exchange income supply into the market.
