Ruble
Nikita Kulagin, Head of Macroeconomic Analysis Department at Sovcombank:
“Last week, the ruble exchange rate weakened against major currencies by 1-3%. Now the conditions are not very favorable for the national currency, when in July and August income is received from low exports, while at the same time there is a decline in advance payments for seasonally high imports in the fourth quarter.
In addition, in September the Bank of Russia is selling significantly fewer yuan within the framework of the budget rule (200 million rubles per day against 7.3 billion rubles per day in August), which also negatively affects the ruble.
We expect the ruble exchange rate to be between 89.5-95.5 rubles per dollar, 101-107 rubles per euro, and 12.8-13.4 rubles per yuan next week.
Next week will be a pre-tax week, so we can expect increased activity from exporters and some support for the ruble.
The risk for the ruble remains a fall in global commodity prices, which will reduce exporters’ incomes and, consequently, the supply of foreign currency with some delay. Attention is also being paid to the situation with imports, the recovery of which, all other things being equal, will weaken the ruble.
Oil
Vladimir Evstifeev, Head of Analytical Department at Zenit Bank:
“The oil market is slowly regaining ground, but is still at low price levels compared to the current year. Rising geopolitical tensions in the Middle East have caused oil prices to rise. The results of the US Federal Reserve meeting, at which the base interest rate was immediately reduced by 50 basis points, proved positive for the oil market, even due to a noticeably weakened dollar.
The focus was on assessing China’s demand outlook. The August data block indicated that the chances of achieving the 5% GDP growth forecast by authorities for this year are narrowing and that risks of a slowdown in energy demand are coming to the fore. China’s refinery output has slowed for the fifth consecutive month, also indicating weakness in demand.
The US industrial statistics were positive. During the week, commercial oil inventories fell significantly more than the market had expected, while the total production level decreased by 100 thousand barrels per day to 13.2 million barrels per day.
The outlook for the oil market appears rather neutral. The growth in quotations is mainly due to short-term factors, while concerns about future oil demand and the risks of reducing supply shortages remain valid. The most likely range in the coming days remains a range of $72-$77 per barrel of Brent.
Exchange
Alexander Shepelev, stock market expert at BCS World of Investments:
“Last week, the Russian market returned to an upward trend, with the Moscow Stock Exchange index approaching 2,800 points. Buyers became more active against the backdrop of a weakening ruble and rising oil prices, simultaneously responding to the Federal Reserve’s rate cut and a new wave of geopolitical tension in the Middle East. Metals have also shown a good rise in recent days, with gold updating its historical record value.
Next week, the euphoria over a sharp US rate cut may fade; second quarter. Preliminary PMIs will also be published for the eurozone at the beginning of the week.
Geopolitics will continue to be a focus of attention for the entire market. If the Middle East conflict escalates, the “war premium” on oil and gold could rise. At the same time, the rise in militaristic risks is a deterrent for global stock markets.
On the domestic agenda we highlight: the ruble, which may slow down its weakening as the peak of the tax period approaches; signals from the Bank of Russia, which is preparing the market for a longer course of restrictive monetary policy; corporate news. Next week, MMK, NKHP, INARCTICA, Delimobil, Zaimer and others will consider the issue of approving dividends and will hold Investor Day on Tuesday. The size of dividends will be reduced by shares of Rostelecom, Cherkizovo and Ashinsky Metallurgical Plant.
Therefore, in the next five days the growth of our market may slow down, but with optimism in commodity prices it is quite possible to reach and consolidate above 2800 points on the Moscow Stock Exchange index.”
