Strategy Note /
Russia

Weekly Radar: Decoupled from markets Russian equities and ruble find stability

  • Russian equities and ruble steady as further sanctions loom

  • Russian stocks and the ruble rallied further last week

  • Global stocks eked out gains despite growing headwinds

John Walsh
John Walsh

Equity Strategist

Contributors
Denis Dorofeev
Boris Krasnozhenov
Alfa
5 April 2022
Published by

Russian equities and ruble steady as further sanctions loom: Russian equities and the ruble currently remain decoupled from global macro factor and news flow due to capital controls. Although we have seen some easing of the latter last week. We expect commodity exporters to remain in demand, although in the second half of last week appetite for retailers and financial stocks improved and that trend can be expected to continue this week. Utilities names are also on the radar due to their defensive nature. The ruble has found support at 83 versus the US dollar after a strong rally over the past two weeks from levels of 120/US$, and we expect the ruble to trade in a new range of around 80-85 versus the US dollar over the near term. Events surrounding Ukraine are likely to remain closely monitored. While talks between Moscow and Kyiv continue, there are no indications that any solutions can be found on a near-term horizon. The US and the EU are expected to unveil new sanctions this week. Newswires are reporting that the measures on the table include a ban imports of Russian coal, cargo transport restrictions, and restriction on exports of industrial equipment. However, banning energy imports from Russia appears to remain off the table still.

Other topics covered:

Markets

  • Russian stocks and the ruble rallied further last week

  • Global stocks eked out gains despite growing headwinds

  • Ruble finds new range after strong rebound

  • Fed watch

  • Confidence wanes

  • US bans Russia from making sovereign debt payments in dollars from US accounts

  • EU to start talks on new Russia sanctions

Macro, FX & Commodities

  • Surge in Russian crude exports despite sanctions questions IEA calculations

  • Chinese lockdown weakens demand for commodities

  • Oil prices edging lower as IEA plans further strategic reserve releases