6 December 2016
Global developments
Market focus has shifted to possible outcomes of the ECB meeting on 8
December. A near-uniform consensus is that ECB will leave all policy rates and
its asset purchases target unchanged, even though some modification of its
quantitative easing program beyond March 2017 is possible. Meanwhile, the
Eurozone’s growth performance continues to strengthen: GDP in Q3 2016 was
up 1.7% YoY SA, higher than the previous reading (and consensus) of 1.6%
YoY. US services PMI came out at 54.6 in November against consensus forecast
of 54.9 and October’s reading of 54.7. US ISM non-manufacturing composite
totaled 57.2 higher than consensus of 55.5. S&P 500 futures are broadly flat after
rising 0.6% yesterday. Euro Stoxx 600 is 0.5% higher. EURUSD rose 1.0%
yesterday and is 0.2% lower today. 10-year UST yields widened 1 bp yesterday
and are flat today. The dollar index is up 0.2% after falling 0.7% yesterday.
Oil prices slipped from a 16-month high as investors are concerned about
implementation of the deal. Crude oil inventories are projected to have
declined 1.5 mn bbl in the previous week. Brent prices are 2.1% down today at
$53.8 per bbl after rising 0.9% yesterday.
Russia and CIS area developments and market colour
Global markets (% change)
Latest
2204.7
S&P
1d
0.6
1w
0.0
The CBR may get a new tool to protect the rouble from sharp fluctuations.
The new instrument (a so called “discrete auction”) was developed exclusively for
the USDRUB pair by MOEX in order to avoid suspension of trading if the rouble’s
FX rate moves more than 20% in 10 minutes. This special auction would last for
15 minutes (10 minutes for collecting bids and offers, 5 min for the CBR’s own
moves, if any, and for determination of the auction’s outcome). The accepted
bids and offers are filled at a uniform price defined as a weighted average of
collected bids and offers. This mechanism would preclude a situation similar to
that in mid-December 2014 when RUB fell some 35% amid market panic.
YTD
7.9
The rouble is flat at 63.8 against the dollar. OFZ yields are 3-8bps lower.
Russia and Kazakhstan longer-term sovereign Eurobond yields are 1-2 bps
tighter. Ukraine sovereign bonds are 3-7 bps tighter.
UST 10y y ield, % (bps change)
2.39
-1
10
12
Brent, $/bbl
53.8
-2.1
16.0
44.3
Gold, $/t oz.
1170.9
0.0
-1.5
10.3
DXY (USD TW index)
100.3
0.2
-0.6
1.7
EURUSD
1.073
-0.4
0.7
-1.3
USDRUB
63.8
Russia and CIS (bps change) Latest
0.0
-2.0
-12.0
1d
1w
YTD
Russia-28 y ields, %
4.9
0
0
-107
Ukraine-24 y ield, %
9.22
-8
-21
-45
Kazakhstan-45 y ield, %
5.69
-2
0
-91
OFZ Feb-27, % p.a.
8.69
-4
-20
-84
MOSPRIME O/N, %
10.44
3
-5
-62
RUONIA 6m, %
10.25
-2
-5
-98
Corporate news
Rosneft placed 10-year bonds for RUB 600bn yesterday with a 10.1%
coupon. The transaction closed very quickly, a sign of off-market nature of the
transaction. The exact purpose of the deal remains unclear (yesterday’s deadline
for privatization of the company’s 19.5% stake passed without a Rosneft board
approval of any buyback decision).
Contacts
Key Global econom ic data and events calendar
Research Team: +44 207 259 8854 [email protected]
Brokerage Dept: +371 6701 1561
[email protected]
Key CIS econom ic data and events calendar
Date
Country
Data
Consensus
Actual
Date
Country
Data
Consensus
Actual
06-Dec
US
Oct trade balance
-$42.0bn
-$42.6bn
06-Dec
Russia
Nov CPI Y oY
5.9%
5.8%
06-Dec
US
Oct f actory orders
2.5%
08-Dec
Ukraine
Key rate
14.0%
06-Dec
US
Oct durable goods orders
2.0%
08-Dec
Ukraine
Nov CPI Y oY
11.8%
06-Dec
Eurozone
Q3 GDP Y oY sa
1.6%
12-Dec
Russia
Oct trade balance
$7.2bn
08-Dec
Eurozone
ECB main ref inancing rate
0.0%
12-Dec
Russia
Oct budget balance
-RUB 1.71tn
09-Dec
US
Oct wholesale inv . MoM
-0.4%
09-Dec
US
Dec U. of Mich. Sentiment
94.4
Date
Sector
Com pany
Period/Event
09-Dec
China
Nov CPI Y oY
2.2%
December
Oil and Gas
Gazprom
Q3 2016
09-Dec
China
Nov PPI Y oY
2.2%
December
Oil and Gas
Sibur
Q3 2016
1.70%
Russia/CIS corporate reporting calendar
Sources: Bloomberg, Cbonds
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