Morning Note /

Alfa Morning Bulletin: 19 January 2021

  • Russian stocks in holding pattern

  • Cyclical stocks should spur Russia higher

  • Mixed stocks market picture this morning, dollar pulls back and crude advances

19 January 2021
Published byAlfa

Russian stocks in holding pattern: Global stock markets were traded sideways on Monday as the surge in Covid rates offset vaccination hopes, planned fiscal stimulus and the promise of economic recovery. Russian equites were in a holding pattern – RTSI (+0.05% @ 1,475) and IMOEX (+0.6% @ 3,472) – with mixed performances sector wise. The ruble slipped lower (-0.5%@ 73.96) with a basket of other EM currencies against a strengthening US dollar. The latter placing a cap on commodities prices, including crude quotes (Brent -0.4% @ 54.87).

Cyclical stocks should spur Russia higher: There is a mixed market backdrop this morning but the mood is shifting towards risk-on. We expect the Russian market to open higher and maintain forward momentum supported by a higher oil price and a stronger ruble, as the US dollar unwinds some recent strength on doubts about how much of President-elect Biden’s fiscal stimulus package will pass Republican opposition in Congress. Janet Yellen, Biden’s nominee to run the Treasury Department, will tell the Senate Finance Committee on Tuesday that the government must “act big” with the coronavirus relief plan. Yellen will also faces the Senate to sell $1.9 trillion stimulus package. We expect Russia inventors to again look at cyclical stocks and project interest in banks, metals & miners and oil & gas names.

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