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Alfa Morning Bulletin: 31 May 2021

  • Investors viewed Friday’s US inflation data as a sign of robust economic recovery
  • Markets retreat as higher cost lead to prospects of a slowdown in economic recovery
  • Russia poised to eke out an advance supported by cyclicals

Investors viewed Friday’s US inflation data as a sign of robust economic recovery: Markets closed last week with optimism as they digested the unveiling of US President Biden’s $6.0 tn budget plan for the forthcoming fiscal year and the US inflation numbers, which showed a 3.1% y/y jump in April, the largest monthly y/y rise since the 1990s. The market put inflation fears aside and viewed the data as more evidence of a robust economic recovery.

The Russian stock market closed the week sideways with high flows as a result of the MSCI and end-of-month rebalancing – RTSI (unch. @ 1,604) and IMOEX (-0.2% @ 3,730). The ruble weakened (-0.2% @ 73.27) against a surging US dollar (DXY +0.3% @ 90.24). US Treasury yields retreated, with the 10UST standing at 1.59%. Oil prices retreated in late trade on Friday (Brent -1.1% @ 68.72).

Russia poised to eke out an advance supported by cyclicals: We expect the Russian equity market to open higher this morning, although trading activity can be expected to be light with the US and the UK markets closed for holidays. The uptick in iron ore, gold and oil prices should provide a tailwind for Russian cyclical stocks with the reflation trade remaining firmly intact. Severstal and Nornickel go ex-dividend.

KEY NEWS

Gazprom 1Q21 IFRS review: strong numbers with improved dividend outlook – POSITIVE

Yandex.Market acquires KupiVIP and Mamsy – NEUTRAL-to- POSITIVE


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The contents of this document have been prepared by Joint Stock Company “Alfa-Bank” ("Alfa Bank") as Investment Research within the meaning of Article 36 of Commission Delegated Regulation (EU) 2017/5...

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