Important events of the day
Russia: Service sector PMI from S&P Global in August – 09:00 Moscow time.
Russia: the volume of operations under the budget rule in September is 12:00 Moscow time.
USA: ISM service sector PMI in August – 17:00 Moscow time.
Russia: "microfinance market trends" from the Central Bank of the Russian Federation in the second quarter.
In the spotlight
On Wednesday, positive sentiment prevailed on global markets. Yesterday's estimates from ADP for August showed weaker-than-expected employment growth in the United States. This gives hope that Friday's official data will also not be conducive to a Fed rate hike. Russian markets declined moderately on Wednesday. Investors played off the mixed geopolitical news, and the first auction of the Ministry of Finance after a long break was marked by the placement of the entire float issue, with a volume of 1 trillion rubles. However, so far this has not provided significant support to OFZ-PD. After the end of the main trading session, Rosstat released a number of data showing not only a return to the weekly decline in prices (-0.01% after +0.01% n/a), but also a further cooling of the Russian labor market.
On Thursday, investors in global markets will pay attention to the publication of the August US services PMI from ISM. Bidders in the Russian Federation will continue to play off yesterday's evening statistics, as well as the August data released in the morning, which showed a sharp increase in the PMI in the Russian service sector to the levels of February. At the same time, Thursday itself will be marked primarily by the announcement of September volumes of currency transactions under the budget rule (12:00 Moscow time).
Oil and the ruble
Yesterday, oil prices continued to rise. Quotes were supported not only by news on the Middle East, but also by weekly data from the US Department of Energy, which showed an unexpectedly strong drop in crude oil inventories. Today, Brent crude futures are trading near $94.9/bbl. In anticipation of more geopolitical specifics, black gold may continue to move in the range of $94-96/bbl for now.
The Russian ruble continued to weaken on Wednesday, at the moment the CNYRU exchange rate on the Moscow Stock Exchange went above the psychological level of 13.00 rubles/ yuan. Today it is slightly lower at 12.95 rubles/yuan. If the Ministry of Finance announces an unexpectedly strong decrease in currency purchases at noon today, the exchange rate may try to go below 12.90 rubles/yuan for a while.
Viktor Grigoriev, Chief Analyst at Bank Saint Petersburg.
