Morning Note /

Alfa Morning Bulletin: 13 December 2021

  • Russian stocks continued to lag

  • Stock markets and commodities tick higher

  • Russian stocks remain laggards, but should eke out an advance

13 December 2021
Published byAlfa

Russian stocks continued to lag: Stock markets traded sideways Friday ahead of key inflation data from the US and as investors assessed the threat of the Omicron variant on economic growth. Markets were also on edge ahead of this week’s Federal Reserve meetings. Russian stocks slipped lower after trading in a holding pattern earlier in the session – RTSI (-1.2% @ 1,612) and IMOEX (-1.4% @ 3,760) – with the major stock indexes all trending lower. The ruble advanced (+0.2% @ 73.27) supported by attempts at improving the geopolitical backdrop. Crude prices ticked higher (Brent +1.0% @ 75.15).

Russian stocks remain laggards, but should eke out an advance: Russian stocks are eking out a thin advance this morning with gains capped by concerns over geopolitical risk. Despite the negative headlines on Russia flooding Western press and the implied threat of sanctions should it attack Ukraine, we see reasons for optimism following last’s videocall between Presidents Putin and Biden and the removal of planned sanctions against Russia in the US National Defense Budget bill. The surge in Omicron cases remain a potential drag on the performances of global stock markets as does the prospect of tighter monetary policy, although the latter appears priced in for now, at least with regards accelerated tapering. Commodity prices are edging higher this morning after China’s top decision makers signaled policies may become more supportive of growth next year. Economists predict China will start adding fiscal stimulus in early 2022. That should provide a tailwind to Russian commodities and materials stocks. Oil prices as strong this morning and the ruble is stable, so we may expect Russian cyclical stocks to advance today.


Russian First Deputy PM Andrei Belousov expects a new wave of inflation in 2H22 – NEGATIVE

CBR governor does not rule out inflation slightly exceeding 7.9% by YE, rate hike above 100 bp is unlikely – NEUTRAL

ALROSA November sales: strong numbers signaling healthy jewelry demand – POSITIVE