Norvik Research 22.02.2017

22/02/2017 19:05

Global developments

Bond prices rallied and the euro touched a six-week low as uncertainty about Europe’s political outlook persisted. EURUSD is down 0.2% at 1.051, the fourth consecutive daily drop. 10-year German Bunds yields are down 8 bps today to 0.245%, the lowest level since early January. France 10-year OAT yields tightened 3 bps to 1.07%. 10-year US Treasury yields are 3 bps lower at 2.40% ahead of today’s release of FOMC minutes. The dollar index is 0.3% stronger today. EuroStoxx 600 is down 0.3%, S&P 500 futures are down 0.1%, after rising 0.6% yesterday. Gold prices are 0.2% higher. Iron ore prices fell 0.5% after surging more than 3% yesterday.

Oil prices declined amid doubts about OPEC’s ability to agree supply cuts for H2 2017 and projections for further increases in US inventories. US crude stocks have likely risen by 3.5mn bbl in the previous week, according to a Bloomberg poll. Oil prices are 1.0% lower (Brent) at $56.1/bbl.

Russia and CIS area developments and market colour

Russia’s consumer demand indicators for January were significantly stronger than expected. Real disposable income leaped 8.1% YoY after falling 6.4% YoY in December (revised from a drop of 6.1% YoY). This surge was due mainly to a one-off payment of RUB 5,000 ($83) to each pensioner last month. Real retail sales fell 2.3% YoY in January, after a 5.9% YoY drop in December (consensus was for a 5.1% YoY decline). In seasonally-adjusted terms, on our estimates, retail sales rose 1.3% MoM after a 0.5% MoM decline in December. Real wages rose 3.1% YoY after 2.8% YoY in December (revised higher from a 2.4% YoY increase); consensus: +2.0% YoY. This rebound in consumer demand indicators may be viewed by the CBR as yet another reason not to rush with a rate cut next month.

The rouble is 1.2% weaker today at 58.1 versus USD, tracking oil prices. OFZ yields are little changed today after widening yesterday afternoon on the larger than expected announced auction volumes. Russia’s and Kazakhstan’s sovereign bond yields are marginally wider today. Ukraine-19 is some 20 bps tighter at 7.25% following fresh comments by government officials about progress of IMF talks, longer-term yields are 1-2 bps tighter.

For more information on the research, please click here.

Norvik Banka Research
+44 207 259 8854
research@norvikuk.com

Brokerage department
+371 6701 1561
broker@norvik.eu

Disclaimer
This report is prepared by Norvik Banka UK Limited, of 46-48 Grosvenor Gardens, London, SW1W 0EB, United Kingdom (hereinafter referred to as the Company) as a marketing communication for information purposes only. Neither the information nor any opinion contained in this report (notwithstanding the source) is intended to be, or should be construed as an offer, a recommendation, an advice or an invitation to make an offer, to buy or sell any financial instrument. Information contained in this report constitutes neither investment nor tax advice and it does not take into account the specific investment objectives, risk appetite and financial situation of anyone who may receive this report. Investors should seek their own advice regarding the appropriateness of investing in any financial instrument discussed in this report and carefully evaluate the risks and eventual losses that are related to the investment services and its compliance with their investment goals.
Investors should note that any income derived from investments in financial instruments may fluctuate and that the price or value of securities and investments may rise or fall. Accordingly, investors may lose their investment or receive back less than originally invested. Past performance and income is not a guide to future performance and income. Foreign currency exchange rates may adversely affect the value, price or income of any security or related investment mentioned in this report. Investing in the Russian or CIS economies and securities involves a high degree of risk and requires appropriate knowledge and experience.
The information contained in this report have been obtained from such public sources what are believed to be reliable, but no representation or warranty is made by the Company with regard to accuracy. Therefore the information contained herein is subject to change without prior notice.
This report should not be viewed as the only source of information, and neither the Company, nor the companies within the NORVIK group and/or any affiliates or employees thereof accept any responsibility or liability whatsoever for any direct or indirect damage arising out of or in any way connected with the use of information contained herein, nor for its authenticity.
This report may not be distributed, copied, reproduced or changed without prior written consent from the Company. Further information, which for the avoidance of doubt cannot be treated as the recommendations and/or advice either, may be obtained from the Company upon request.
This report has not been prepared on the basis of the requirements of regulatory provisions promoting independence of investment research and is not subject to the prohibition from making transactions before disseminating investment research.
Norvik Banka Research is a Trading Name of Norvik Banka UK Ltd, which is Authorised and Regulated by the Financial Conduct Authority, FRN: 681329. Registered in England and Wales with number 08940522. Registered Office: 46/48 Grosvenor Gardens 1st Floor, London, SW1W 0EB.

Disclaimer
The information contained in this communication from the sender is confidential. It is intended solely for use by the recipient and others authorized to receive it. If you are not the recipient, you are hereby notified that any disclosure, copying, distribution or taking action in relation of the contents of this information is strictly prohibited and may be unlawful.

This email has been scanned for viruses and malware, and may have been automatically archived by Mimecast Ltd, an innovator in Software as a Service (SaaS) for business. Providing a safer and more useful place for your human generated data. Specializing in; Security, archiving and compliance. To find out more Click Here.

Latest news