The dollar is weaker today, after fresh strong increases in the aftermath of Fed’s decision. The US dollar index is 0.1% lower, having risen 0.6% yesterday and 1.3% on Wednesday. EURUSD recovered to 1.045 today, after touching 1.037 yesterday, the minimum since January 2003. 10-year US Treasury yields increased 3 bps yesterday to 2.60% and are 2 bps lower today at 2.57%. S&P 500 futures are 0.1% higher after the index added 0.4% yesterday. All of Euro Stoxx 600, Nikkei 225 and CSI 300 are 0.2% higher today. Gold prices have recouped half of yesterday’s 1.3% losses.
Oil prices are little changed today. Libya has reopened one of its main oil fields and is lining up the first shipment in two years from its largest export terminal. Brent price are 0.7% higher today at $54.4/bbl.
Russia and CIS area developments and market colour
Russia’s central bank left the key unchanged at 10.0%, in line with expectations, and signaled continuing cautious stance. According to the press statement, inflation and economic activity have been broadly in line with CBR’s forecasts. Inflation fell to 5.6% YoY as of 12 December from 6.1% in October due to the effect of higher oil prices, weak consumer demand and good crops restraining food inflation. Economic activity stopped falling in QoQ terms in Q3 and will likely grow moderately in 2017, according to CBR’s forecasts and estimates. The CBR Governor Nabiullina observed during the press conference that a cut in policy rate in Q2 2017 looks more likely than Q1 2017, reflecting the regulator’s reluctance to change its oil price assumptions.
Russia’s industrial production data for November came out stronger than expected. IP in November increased 2.7% YoY compared to consensus forecast for a 0.3% rise and a 0.2% YoY drop in October. According to Rosstat’s estimates, in seasonally- and work day-adjusted terms, IP in November rose 0.5% MoM after 0.6% growth in October. The mining and quarrying output rose 2.7% YoY in November after a 0.8% YoY increase in October, led by gas extraction (+2.6% YoY) and oil output (+3.2% YoY). Manufacturing output increased 2.5% YoY, after falling 0.8% YoY in October. The recovery in officially-measured output was consistent with the recent PMI data indicating a recovery in manufacturing.
The rouble is 0.4% stronger today at 61.6 against the dollar. OFZ yields are 2-8 bps tighter today. Russia and Kazakhstan longer-term sovereign Eurobond yields are 1-2 bps tighter. Azerbaijan-24 and Armenia-25 yields are 2 and 5 bps lower respectively, while Ukraine sovereign bonds are 2-3 bps wider.
For more information on the research, please click here.
Norvik Banka Research
+44 207 259 8854
+371 6701 1561
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.
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.