Today, the MICEX index for the first time in history has overcome the level of 2000 points. Recovery of oil prices on expectations of preservation of soft monetary policy the US Federal Reserve maintains interest in the risky Russian assets. However, under conditions of high volatility in the oil market and a number of global risks expected to continue steady Russian market growth is not necessary.
At the auction on Friday the MICEX index updated the historical maximum, reaching 2006.25 points. Bidding closed at 2003.77 points, exceeding the previous day’s close of 1.4%. The RTS index, expressed in the currency in the course of trading has reached the level of 971.66 points, the highest since Aug. 26. At the end of the day he stood at 969.86 points, 2.6% higher than the closing on Thursday.
As market participants have noted the support it receives from the oil price recovery. According to Reuters, after four days of continuous decline today in the November Brent crude futures rose by 2.7% and came close to the level of $ 47 per barrel, in fact returning to Wednesday’s closing value. On the spot market, oil prices rose by more than 2%, recouping the previous day’s losses: Brent crude oil imitate to $ 45.6 per barrel, Urals – to $ 43.7 per barrel. In addition, support for the “bulls” had statistics on the US labor market. Published data on the number of jobs created fell short of investors’ expectations in the United States -.. 155 thousand against the expected 180 thousand, while a month earlier, the figure was 255 thousand wage growth was also somewhat weaker than expected (+ 2.4% instead of +. 2.5%), which should keep inflation in the country.
against this background, waiting to raise the key rate immediately dropped. As the analysts of “Raiffeisen Capital” Sofia Kirsanov, published statistics reassured global investors, who after a few applications deputy chairman of the Fed Stanley Fischer about the urgent need to raise the rate in September (as nearly full employment has created all conditions for this) seriously concerned about future tightening of monetary policy. Now, however, reason to fear no more, and the US currency started to weaken again, the expert points out. In addition, as the junior portfolio manager GHP Group Alena Nikolaeva, in Russia decreased slightly inflationary expectations, which could lead to a possible softening of monetary policy at the Central Bank on 16 September (reduced rates at 0.5 basis points) that could also win back investors . The continuing “risk appetite” of global investors, according to EPFR, secured ninth week of inflows into funds focused on emerging markets. The Russian equity funds inflow also resumed (+ $ 29 million instead of the outflow of $ 24.5 million the previous week).
GDP in July decreased by 0,1%
According to the Ministry of Economy of Russia, seasonally adjusted GDP declined in July by 0.1%, due to the negative dynamics of the manufacturing sector and wholesale trade. It is noted that GDP in July was lower than last year by 0.7%, and for seven months of this year decreased by 0.9% compared with the corresponding period last year. The seasonally adjusted industrial production index was -0.5%. It fixed a reduction in the production and distribution of electricity, gas and water. In mining and agriculture remained an increase of 0.1% and 0.7% respectively. Unemployment in July continued seasonal decline to 5.3%.
As pointed out by the director of the analysis of financial markets and the macroeconomy “Alfa Capital” Vladimir Bragin, in 2015 Russian companies, despite the crisis, were able to show profit growth, and in 2016 data confirmed that this was not a one-time event associated with the devaluation of the ruble. According to him, as investors prefer assets of Russian bonds, the shares of interest was more wary. However, bond yields since the beginning of 2015 fell rapidly and have now reached the levels from which rapid revaluation of debt instruments is not possible. It can enhance the demand for Russian stocks. According to Mr. Bragin, to overcome the 2000 points “can be a good psychological help».
However, as noted by Ms. Nikolaeva, constraints for Russian assets are also are geopolitical factors, uncertainty oil dynamics sanctions (on the eve of the US extended sanctions list, adding to public company “Mostotrest”). As stipulated Vladimir Bragin, “it is unlikely in the case of oil prices wide fluctuations and the availability of a number of other global risks increase will go” on line “, and subsidence, and the deep, can be enough».
Used but strong inflation
Bulletin of the Department of research and forecasting (DIP) of the Central Bank,” what do the trends “of July 2016 for the first time describes the deviation of the estimated consumer inflation trend – the assumption that the inflation rate can not reach the level of 5.5% per annum towards the end of 2017 ( and “hang” at the level of 7% yoy in August 2016), finds confirmation in the statistics. Formally, the food and non-food inflation has accelerated in annual terms, which was offset by lower prices in the services inflation, however, these data are not as reliable – are complemented by base effects rather chaotic summer of 2015, the price changes. Read more
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