Ruble
Mikhail Vasiliev, chief analyst at Sovcombank:
– We believe that the ruble may continue to strengthen moderately in the coming week. The estimated trading range is 66-70 against the dollar, 72-76 against the euro, 9.8-10.3 against the yuan.
The main factor supporting the ruble in January is the large seasonal current account surplus in the RF balance of payments. Foreign exchange inflows from exports remain high thanks to rising oil prices, while demand for foreign exchange for imports and foreign travel falls due to the low season.
Also in favor of the ruble will be the daily sale of foreign currency by the Ministry of Finance under the updated budget rule. From January 13 to February 6, the agency will sell 3.2 billion rubles in yuan daily to make up for the shortfall in oil and gas budget revenue. Through arbitrage operations, this will help strengthen the ruble against the dollar and the euro.
Negative factors for the ruble are the likely reduction in Russian oil production and exports due to Western sanctions, expectations of a decrease in the export of Russian oil products after the European embargo on their imports came into force on February 5, geopolitical risks, information on the preparation of the tenth package of European sanctions against RF.
Petroleum
Vladimir Evstifeev, head of the analytical department of the Zenit bank:
– The oil market continues to grow, which is based on better prospects for the global economy, which may lead to higher energy demand.
China is showing signs of a revival in import activity after going through the peak of the epidemic in the country.
Meanwhile, the inflation trend in the US and the EU is showing signs of slowing down, allowing for looser monetary policy this year. The growth in risk demand in global markets leads to a further weakening of the dollar, which also supports oil prices. Market participants reacted rather modestly to data of an unexpected sharp rise in US oil inventories last week. Oil reserves in the US have been above the average level for five years, which is traditionally a break-even value for the local market.
Given the continued positive momentum from December’s US inflation statistics, the dollar could continue to weaken on the back of growing demand for risky assets. In this context, the bullish momentum in the world oil market is more likely to continue, which may lead to the transition of Brent prices to the range of $85-90 per barrel.
Exchange
Alexander Bakhtin, Investment Strategist at BCS World of Investments:
– The first full trading week of the year on the Russian stock market, as expected, brought an increase in trading volumes and an increase in investor activity, however, the dynamics of the Moscow Stock Exchange index it maintained a predominantly lateral format. One of the key obstacles to growth is the wave of strengthening of the ruble, which followed the announcement of the return of the Central Bank and the Ministry of Finance to foreign exchange interventions from January 13.
At the same time, the external environment remains generally favourable. In the US, consumer inflation is falling and with it the likelihood of a tougher Fed rate scenario. Meanwhile, China is opening its borders, easing anti-COVID restrictions. The fall of the dollar against the main currencies to multi-month lows, as well as positive expectations for fuel demand in China during the long New Year holidays according to the lunar calendar, support oil prices above $80, which is positive for ruble assets.
Our short-term outlook on the Russian market is moderately positive. The potential for strengthening the ruble at the current stage seems to have been exhausted, although the tax period is not far off, for which many exporters begin to prepare in advance by selling foreign currency. External sentiment remains positive, but at the same time very sensitive to the informational background.
Commodity prices, ruble exchange rate dynamics, geopolitics, signals from regulators and key statistics will remain in the spotlight of investors next week. Of the important macro data, we highlight a block of indicators for China, which includes an estimate of GDP for 2022 (Tuesday), the December CPI in the eurozone and the US producer price index (Wednesday), data on the US construction sector (Thursday, Friday).
Targets for the week for the Moscow Stock Exchange index – 2120-2250 points, for the RTS – 920-1070 points.
