20 Mar 2014
EMEA EM Express: Russian stocks up on hopes that conflict with Ukraine is receding
FXStreet (Łódź) - The uncertain situation in Ukraine continues to dominate EMEA news on Thursday, following the seizure of two Ukrainian bases in Crimea by pro-Russian forces. Russia's recent moves prompted NATO Secretary-General Anders Fogh Rasmussen's comments yesterday that Moscow is trying to "redraw the map of Europe".
"This is a wake-up call," Rasmussen' said. "This is the gravest threat to European security and stability since the end of the Cold War."
United Nations chief Ban Ki-moon is due to meet Russian President Vladimir Putin today and the Ukrainian authorities on Friday to hold talks on ways of solving the conflict peacefully.
Meanwhile, President Vladimir Putin urged the country's richest to pay taxes in Russia, following further warnings from the EU and the US that more sanctions would be imposed as a response to Russia's annexation of Crimea. Russian businessmen could be hit in effect, but for now rather political politicians have been targeted.
European Union officials are discussing the situation in Ukraine at a meeting in Brussels today. They will try to reach a consensus on further sanctions on Russia, which might be problematic as they have different views on how severe the response should be. British Prime Minister David Cameron is opting for "far-reaching" sanctions while German Chancellor Angela Merkel advises a softer approach.
Economic data
On Thursday Russia published various pieces of economic data. Year-on-year Retail Sales, released by the Russian Federation Federal State Statistics Service, were up 4.1% in February, following a 2.4% increase in January and above forecasts 2.5% growth. Russia's Unemployment Rate remained unchanged at 5.6% for the second running month in February, against projections of edging up to 5.7%.
Furthermore, the Central Bank of the Russian Federation informed that its reserves dropped from 494.60B dollars to 493.20B dollars.
Jacqui Douglas, Senior Global Strategist at TD Securities believes that “macro indicators have worked only at the margin of a much more powerful driver—the return of risk appetite following Putin’s address to the parliament on Tuesday.”
“The momentum may extend a little longer, but however optimistic the market may be at the moment, we believe tensions have not de-escalated. On both the Russian and Western fronts, cold war playbook rhetoric continues to characterize a dangerous standstill. And retail sales and u-rate are unlikely to add much to this picture. ”
Estonia released Producer Price Index data on Thursday, which declined by 0.4% in February this year, compared with the 0.4% increase in January2013 and fell by 0.9 % compared to February 2013.
Moreover, Israel's Central Bureau of Statistics said today that on an annual basis the country's Industrial Output fell by 0.58% in January compared with the 11.4% rise the previous month, against expectations of a 4.83% increase. Month-on-month industrial production slid 1.4%, following +1.8%.
Technicals
Fears of West's further sanctions on Russia resulted in Russian markets declining for the second day while the ruble remained almost unchanged, trading at 42.3379 against Bank Rossii’s dollar-euro basket. USD/RUB rose 0.1% to 36.0975 against the dollar.
The daily FXStreet Trend Index for USD/RUB was slightly bullish, with the OB/OS Index neutral. RSI was at 58.8949 at the last close. Daily 2-StDev Volatility Bandwidth was shrinking at 3118 pips, with ATR (14) expanding at 3574 pips. The 1D 200 SMA is at 33.2922, while the 1D 20 EMA at 36.0733.
"This is a wake-up call," Rasmussen' said. "This is the gravest threat to European security and stability since the end of the Cold War."
United Nations chief Ban Ki-moon is due to meet Russian President Vladimir Putin today and the Ukrainian authorities on Friday to hold talks on ways of solving the conflict peacefully.
Meanwhile, President Vladimir Putin urged the country's richest to pay taxes in Russia, following further warnings from the EU and the US that more sanctions would be imposed as a response to Russia's annexation of Crimea. Russian businessmen could be hit in effect, but for now rather political politicians have been targeted.
European Union officials are discussing the situation in Ukraine at a meeting in Brussels today. They will try to reach a consensus on further sanctions on Russia, which might be problematic as they have different views on how severe the response should be. British Prime Minister David Cameron is opting for "far-reaching" sanctions while German Chancellor Angela Merkel advises a softer approach.
Economic data
On Thursday Russia published various pieces of economic data. Year-on-year Retail Sales, released by the Russian Federation Federal State Statistics Service, were up 4.1% in February, following a 2.4% increase in January and above forecasts 2.5% growth. Russia's Unemployment Rate remained unchanged at 5.6% for the second running month in February, against projections of edging up to 5.7%.
Furthermore, the Central Bank of the Russian Federation informed that its reserves dropped from 494.60B dollars to 493.20B dollars.
Jacqui Douglas, Senior Global Strategist at TD Securities believes that “macro indicators have worked only at the margin of a much more powerful driver—the return of risk appetite following Putin’s address to the parliament on Tuesday.”
“The momentum may extend a little longer, but however optimistic the market may be at the moment, we believe tensions have not de-escalated. On both the Russian and Western fronts, cold war playbook rhetoric continues to characterize a dangerous standstill. And retail sales and u-rate are unlikely to add much to this picture. ”
Estonia released Producer Price Index data on Thursday, which declined by 0.4% in February this year, compared with the 0.4% increase in January2013 and fell by 0.9 % compared to February 2013.
Moreover, Israel's Central Bureau of Statistics said today that on an annual basis the country's Industrial Output fell by 0.58% in January compared with the 11.4% rise the previous month, against expectations of a 4.83% increase. Month-on-month industrial production slid 1.4%, following +1.8%.
Technicals
Fears of West's further sanctions on Russia resulted in Russian markets declining for the second day while the ruble remained almost unchanged, trading at 42.3379 against Bank Rossii’s dollar-euro basket. USD/RUB rose 0.1% to 36.0975 against the dollar.
The daily FXStreet Trend Index for USD/RUB was slightly bullish, with the OB/OS Index neutral. RSI was at 58.8949 at the last close. Daily 2-StDev Volatility Bandwidth was shrinking at 3118 pips, with ATR (14) expanding at 3574 pips. The 1D 200 SMA is at 33.2922, while the 1D 20 EMA at 36.0733.