Ruble
Mikhail Vasiliev, chief analyst at Sovcombank:
– We believe that the ruble may continue its moderate weakening in the coming week. The estimated trading range is 70-73 against the dollar, 76-79 against the euro, 10.3-10.7 against the yuan.
The main negative factor for the ruble may be the expectation of a decrease in the export of Russian oil products after the entry into force on February 5 of the European embargo on its imports and the price ceiling for its sale to third countries.
At the same time, the ruble will be supported by higher volumes of FX interventions under the budget rule. Starting February 7, the Ministry of Finance will almost triple the yuan sales volume from the reserves to make up for the shortfall in oil and gas revenue from the budget: the daily sales volume will be equivalent to 8.9 billion rubles.
Also in favor of the ruble will be the favorable seasonality of the beginning of the year. February is historically the most favorable month of the year for the ruble, also due to the strong seasonality of the current account of Russia’s balance of payments (combination of high exports with a decrease in imports).
The decision of the Bank of Russia on the key rate on Friday, in our opinion, will not have a significant impact on the ruble exchange rate. We expect the Central Bank to keep the key rate at the current 7.5% pa level and toughen the rhetoric with a hint of the possibility of a rate hike later this year.
Oil
Vladimir Evstifeev, head of the analytical department of the Zenit bank:
– The oil market is implementing a downward correction scenario in the context of another wave of fears for future demand. The OPEC+ meeting was held strictly within the framework of expectations, which involved a change in oil production quotas.
The reason for the fall in prices was the meetings of the main central banks, which cautiously assessed the growth prospects of the largest economies and maintained fears of high inflation. However, the global weakening of the dollar supported the entire segment of risk assets, including the commodity market.
The US industry data also became the reason for the price decline. US trading stocks rallied again, and much more than investors expected on average.
Despite the current drop in oil prices, the market retains growth potential. The driver may be the news about the restoration of energy demand from China, as well as the continuous stream of moderately positive statistics on the EU and US economies.
Therefore, with the current set of factors, Brent prices seem more likely to remain in the $80-85/barrel range.
Exchange
Alexander Bakhtin, Investment Strategist at BCS World of Investments:
– Last week, the Russian stock market caught a wave of growth. The Moscow Stock Exchange Index finally returned to levels above 2,200 points and set its sights on breaking through the area of strong resistance near 2,250 points.
The positive dynamics was provided mainly by the growth of values of representatives of the metallurgical and IT sectors. But the heavier oil and gas chips continue to “slip” due to the effect of already introduced and expected sanctions measures from the West. Given the introduction of another EU embargo on February 5 and a price ceiling, this time for Russian oil products, positive changes in sentiment regarding oil stocks should not be expected. This means that the short-term prospects for the development of the upward movement of the domestic market can be assessed as restricted.
Ruble weakness may provide some support for exporters’ actions. The sanctions contraction of incoming export earnings and the simultaneous growth of imports is a negative combination for the national currency. High oil prices and the sale of the yuan under the budget rule may stop the ruble from weakening.
The World Central Banks brought no surprises during the week, raising interest rates in line with basic market expectations. At the end of next week, the Bank of Russia will give its opinion. Most likely, the key rate will remain at the current level – 7.5%. Such a scenario would generally be neutral for ruble assets.
On Tuesday, February 7, Fed Chairman Jerome Powell will deliver a speech. Currency signals, commodity prices, ruble exchange rate dynamics, geopolitics, corporate news, and key statistics will continue to determine market sentiment. Of the important macro data for the week, we highlight the volume of retail sales in the eurozone for December (Monday), data on the US trade balance (Tuesday), the consumer price index for January in China (Friday ). In the United States, company financial results will continue to be released as part of the reporting season, in particular, Activision Blizzard, ON Semiconductor, Tyson Foods, Pinterest (Monday), Walt Disney, CVS Health Corp, Uber Tech (Wednesday), AbbVie, PepsiCo will present their results this week. , Philip Morris (Thursday).
Targets for the week for the Moscow Stock Exchange index – 2150-2270 points, for the RTS – 920-1050 points.
