External background puts pressure on the ruble

22 December 2020

Last week, the Russian ruble entered a correction phase after a long period of strengthening: the USD / RUB rate rose by 0.52% to RUB 73.33 / USD, while the EUR / RUB rate rose by 1.61% to 89.80 RUB / EUR As a result, the cost of the dual-currency basket of the dollar and the euro (in the proportion of 55% and 45%, respectively) went up by 1.01% to 80.75 rubles.

The current five-day trading week began with a rapid fall in the national currency rate. From the beginning of the week to mid-Tuesday, the dollar has risen in price against the ruble by 2.77%, to 75.36 rubles / dollar, and the single European currency is strengthening by 2.52% and is trading at 92.06 rubles / euro.

The reason for the drawdown of the ruble was a sharp deterioration in the external background as a result of the discovery in the UK of a new strain of coronavirus, the danger of which lies in its faster rate of spread. As a result, the British government introduced a full lockdown in London and the south-east of England. At the same time, more than 20 countries, including France, Germany, Italy, the Netherlands, Ireland, Canada, Argentina, Chile and Russia, have suspended flights with Great Britain. Also, this strain has already been found in Italy, which poses threats to the strengthening of restrictive measures in the EU. Uncertainty will remain until the developers of vaccines against the coronavirus confirm their effectiveness in the fight against the new strain. European virologists estimate that vaccines can take three to four weeks to test.

At the same time, it is worth noting that this is far from the first and certainly not the last mutation of the coronavirus: throughout the year, new strains of Covid-19 have been repeatedly recorded, which, however, did not cause panic in the markets. In this case, the negative reaction of investors is largely due to the introduction of severe restrictions in the UK itself and the suspension of air traffic with the country, which may affect the pace of recovery of the British and the global economy in general. It is very likely that with the confirmation of the effectiveness of vaccines against the new strain of the virus, the situation in the UK and, as a result, in global markets, will quickly return to normal.

One of the key events of the past week was the meeting of the Bank of Russia. As a result, the regulator left the key rate unchanged at 4.25%. At the same time, a significant moment was the change in the signal regarding the future monetary policy (MCP) – the statement was removed from the statement about the intention to assess the feasibility of a further rate cut at the next meetings, and it is no longer asserted that there is space for this. The assessment of the balance of proinflationary and disinflationary risks has also changed – now the Central Bank believes that disinflationary risks in 2021 no longer prevail to the extent that they were earlier, given the strengthening of short-term proinflationary factors and the risks of their longer action. In our opinion, the likelihood of an additional key rate cut before the start of monetary policy normalization (transition from soft to neutral policy, with a key rate range of 5-6%) has noticeably decreased, although it has not completely disappeared. At the same time, the Central Bank still believes that the soft monetary policy will continue to support the economy next year.

It should be noted that inflation next year is unlikely to exceed the level of 5-6%, especially for a long period, and real yields of OFZs with long maturities will remain in the positive zone. In turn, the normalization of the situation on world markets will contribute to the growth of demand for securities with positive real returns. If geopolitical and sanctions risks remain at a relatively low level, this will support the Russian ruble.

As for macroeconomic statistics, last week the data for Russia came out in a rather positive way. Thus, industrial production fell by 2.6% (y / y) in November, compared with a 5.5% (y / y) decline in October, while analysts had expected a deeper fall by 4.8% (y / y). d). Positive dynamics was recorded in terms of unemployment: in November, the indicator fell by 0.2 pp to 6.1%, which turned out to be better than the consensus forecast of 6.3%. Also released was data on retail sales. In November, the indicator decreased by 3.1% (y / y), as predicted, against a decline of 1.4% (y / y) a month earlier. Important indicators for Russia will not be published this week.

On the daily chart, the USD / RUB rate overcame the resistance at 75.00. Stochastic lines are directed upwards, and their position indicates some stock of the instrument upward. The nearest target is the level of 76.10, near which the line of the 50-day moving average passes. After reaching this mark, the growth of the course may slow down.

EUR / RUB quotes have consolidated above 91.50 and continue to move upward. At the same time, the stochastic lines have already approached the overbought zone, which indicates a limited upside potential for the instrument and the likelihood of its downward reversal in the short term.

This information is not investment advice.

Libertex [CPS] WW



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