Morning Note /
Russia

Alfa Morning Bulletin: 8 April 2021

  • Russian equities rallied as global markets moved into a sideways pattern

  • Fed’s commitment to loose policy cheers markets

  • Russian equities on track to advance as geopolital and sanctions risk ease

Alfa
8 April 2021
Published byAlfa

Russian equities rallied as global markets moved into a sideways pattern: Global markets traded in a sideways pattern yesterday looking for direction, with investors focused on the minutes of the Federal Reserve’s March meeting. The Russian stock market and the ruble got off to a slow start as investors tried to read between the lines of the headlines in relation to Russia-Ukraine tensions, however that changed late afternoon after Ukraine announced it was returning to the Normandy format peace talks – RTSI (+0.2% @ 1,430) and IMOEX (+0.2% @ 3,499). The ruble also reacted positively to the news (+0.2% @ 77.09), pulling back from a one-year low. Oil prices were under pressure yesterday after EU drug regulators said there’s a possible link between the AstraZeneca vaccine and a rare blood clot but swung higher after EU regulators changed their tune and reiterated that using the vaccine outweighs the risks (Brent +0.7% @ 63.16).

Russian equities on track to advance as geopolital and sanctions risk ease: We expect the Russian stock market and the ruble to build on yesterday’s gains supported by a dial–down in tensions with Ukraine. On the sanctions front, Bloomberg published an article, citing US officials, which suggests that while sanctions are on the table for election interference and the SolarWinds hack, economically damaging sanctions are not on the table. The tone of the comments suggest a more pragmatic approach by Biden, targeting individuals and Russian state agencies. With yields on Treasuries retreating along with the US dollar there is an improved backdrop for EM assets and we expect a broad-based rally in Russian equities today.

Key news

Inflation reached 0.7% m/m in March – 5.8% y/y – Negative

Sberbank (O/W): March 2021 RAS results – Positive