Ruble
Mikhail Vasiliev, chief analyst at Sovcombank:
“We expect the ruble exchange rate to remain stable in the coming week and will be quoted within the established ranges of 11.7-12.3 rubles per yuan, 89-93 rubles per dollar, and 98-103 rubles per euro.
The August fiscal period, when exporters actively sell foreign currency to make payments to the budget, ended last week, and the ruble lost this support factor by the last week of September.
Overall, the factors for and against the ruble remain balanced.
The ruble is supported by high oil prices and a trade surplus, a decline in imports due to problems with payments with friendly countries due to Western sanctions, the mandatory sale of foreign exchange earnings for the largest exporters and the sale of yuan from reserves as part of budget operations for 7.3 billion rubles a day, and high ruble interest rates.
We believe that saving in rubles will become even more profitable in the coming months. We expect the key rate to rise by another 200 basis points in the fall, to 20%.
The negative factors for the ruble are geopolitical and sanctions risks, seasonal demand for foreign currency for summer holidays abroad, capital outflows, demand for foreign currency to buy shares of Russian companies from foreign owners, and increased budget expenditures, which, among other things, are spent on the purchase of imports.
Oil
Vladimir Evstifeev, Head of Analytical Department at Zenit Bank:
“After another downward correction to the level of $75 per barrel, Brent oil prices have returned to their growth trajectory.
Concerns about the prospects for a global decline in oil demand were offset by worries about possible disruptions to Libya’s oil supply. Libya’s oil production in July was about 1.2 million barrels per day, which is significant for the global market.
Supporting factors include growing market confidence in a 50 basis point cut by the US Federal Reserve at its September meeting. The futures market estimates the probability of a 50 basis point cut at 35%, compared to around 10% a month ago. US industrial statistics were moderately negative for the oil market. Commercial oil inventories fell less than expected during the week, but the decline in gasoline inventories was more significant, and total production fell by 100,000 barrels per day to 13.3 million barrels per day.
The short-term outlook for the oil market appears moderately positive. The reduction in supplies from Libya partially alleviates concerns about the gradual withdrawal of OPEC+ from the conditions of voluntary production cuts, while the end of the driving season still has little impact on the level of oil reserves. Quotations have every chance of consolidating above the level of $80 per barrel, as long as geopolitical conditions remain tense.
Exchange
Dmitry Puchkarev, stock market expert at BCS World of Investments:
“The reporting season for the first half of the year ended this week, but investors will continue to digest the published data for some time next week, market volatility should remain high, sellers’ activity will continue in companies with the largest debt burden: Segezha, M.Video, Mechel, Norilsk Nickel.
The next meeting of the Central Bank of the Russian Federation on the key interest rate will be held on September 13. Even if it is not raised, the high cost of long-term financing will continue to support the ruble. In addition, as the meeting approaches, market participants will increasingly pay attention to the dynamics of inflation; Rosstat’s weekly data will be published on Wednesday.
The downward trend on the Russian market remains relevant; to break it, additional drivers will be needed: this could be a softening of the Bank of Russia’s rhetoric on the outlook for monetary policy, an improvement in the geopolitical context, or at least a weakening of the ruble. However, while there are no triggers for a change in sentiment, there are risks of updating the lows in the Moscow Exchange index and dropping to 2,650 points.
