Morning Note /

Alfa Morning Bulletin: 10 November 2021

  • Inflation headwinds stall equity rally

  • Global markets cautious ahead of US CPI data

  • The Russian equity market may eke out an advance despite global inflation headwinds

10 November 2021
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Inflation headwinds stall equity rally: Russian equities succumbed to global headwinds yesterday fueled by mounting inflation fears – RTSI (- 0.1% @ 1,864) and IMOEX (-0.7% @ 4,187). There was strong demand for RUAL (+7.0%) ahead of the expected MSCI inclusion at the end of the week. PIKK (+5.0%), HHR (+4.7%) and DSKY (+2.9%) were also well bid. The ruble advanced (+0.6% @ 70.79) with the support of a surge in the price of oil (Brent +1.6% @ 84.78).

The Russian equity market may eke out an advance despite global inflation headwinds: Global equities are hovering near all-time highs as investors weigh strong earnings, easing travel curbs and US infrastructure spending against the risk of more persistent inflation that may lead to tighter monetary policy. Data yesterday showed the producer price index accelerated in October, further fueling concerns about inflationary pressures in the US economy. China's factory gate inflation hit a 26-year high in October as coal prices soared amid a power crunch in the country's industrial heartland, further squeezing profit margins for producers and heightening stagflation concerns. The US consumer price index data for October is scheduled for today and is forecast to have climbed 0.5% in October after a 0.4% rise in September, according to Refinitiv data. A strong inflation print is likely to renew talk of earlier rate hikes. The Fed’s fund rate is already pricing in a hike in June 2022. With oil prices surging above $85 per barrel and inflation high on the agenda Russian commodity producers should see support and the Russian equity market may eke out gains today.


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