The US dollar and the euro turned down and are actively depreciating on the Moscow Exchange (MOEX: MOEX) on Friday afternoon, the ruble began to grow towards the dual-currency basket amid the absence of new impulses that have a pronounced negative character.
The dollar exchange rate amounted to 56.89 rubles. at 15:00, which is 1.6 rubles lower than the closing level of previous trading. The euro cost 57.08 rubles, having also fallen in price by 1.6 rubles. The cost of the dual-currency basket ($0.55 and EUR0.45) decreased by the same 1.6 rubles – to 56.98 rubles.
According to Interfax-CEA experts, the ruble turned up after declining at the start of trading and is actively rising against the dollar and the euro during the day of the last trading week. Market participants positively assessed the absence of a new negative in terms of the risks of strengthening the geopolitical negative around the Russian Federation following the results of an additional plenary meeting of the State Duma, at which, as announced, only some personnel issues and bills were considered.
The State Duma may hold other extraordinary meetings before the start of the autumn session, an informed source told Interfax on Friday. „There may be other additional extraordinary meetings before the start of the autumn session,” the source said. He noted that „this corresponds to the position that deputies should always be on the mobilization agenda.”
In addition, the players ignored the news on the subject of sanctions. The Canadian Foreign Ministry announced the introduction of new sanctions against Russia in connection with a special operation in Ukraine. „On July 14, 2022, Canada made further amendments to the rules on special economic measures (Russia) to prohibit the provision of two production services to the Russian oil and gas, chemical and manufacturing industries,” the document said on the ministry’s website.
According to the Ministry of Foreign Affairs, „any person in Canada and any Canadian outside of Canada is prohibited from providing services to Russia or any person in Russia” related to the production of metal products, computer, electronic and optical products, electrical equipment, cars, trailers and semi-trailers, transport equipment, land transport and pipelines.
The EU plans on Friday to propose the next, seventh, package of anti-Russian sanctions, as well as measures to tighten previously imposed restrictions, Bloomberg reports, citing informed sources. „The European Union is going to propose on Friday a new list of sanctions against Russia (…), as well as measures to tighten previously approved sanctions packages,” the agency informs.
According to sources, the new sanctions are expected to affect Russian gold imports. As part of the new package of measures, 50 more individuals and legal entities are also planned to be included in the sanctions lists.
In addition, the interlocutors of the agency said that the European Commission will propose clarifications and corrections to previously introduced measures that may have prevented the export of agricultural products and food from Russia. As part of such changes, the EU is expected to clarify that ports that supply such goods are not subject to sanctions, one source said.
It is noted that the proposal of the European Commission should be considered and approved by the EU member states. Brussels’ goal is to approve a new package of anti-Russian measures next week.
Earlier on Friday, Deputy President of the European Commission (EC) Maros Sefcovic said that the next, seventh, package of EU sanctions against Russia would apply to the export of Russian gold.
Oil quotes accelerated growth during trading on Friday, recovering from falling to April lows.
September futures for Brent crude on London’s ICE Futures exchange rose by 1.81% by 15:10 Moscow time to $100.892 per barrel. WTI futures for August in electronic trading on the New York Mercantile Exchange (NYMEX) are growing by 1.4% – up to $97.12 per barrel.
The rise in oil prices on Friday is largely due to another change in market expectations regarding the increase in the Fed’s key rate. If on the eve of the traders as a whole tuned in to raise the rate by 100 basis points (bp) at once at the July meeting, today they are again waiting for a 75 bp increase. after speeches by a number of central bankers.
In particular, the rate hike by 75 b.p. supported by some of the most prominent „hawks” in the leadership of the Fed, Board of Governors Christopher Waller and the head of the Federal Reserve Bank of Cleveland, Loretta Mester.
Since the beginning of this week, the price of WTI has fallen by about 9%, Brent – by 7%, meanwhile, notes MarketWatch.
The only question is which direction the ruble will choose. At the moment, we can talk about the prerequisites for the weakening of the „Russian” as the implementation of the transformed budget rule approaches. But at the same time, while the trade balance remains in a record surplus, a significant fall in the ruble exchange rate is still out of the question,” Nikolai Pereslavsky, an analyst at the Economic and Financial Research Department at the CMS Institute, believes.
„The dynamics of trading is quite calm, without moving prices in one direction or another. On the agenda of this month is the question of lowering the rate or even stabilizing it at this level. Credit activity has increased over the past 2 months, but is still not at the level of 2021 and the beginning of 2022. We may not see a radical change in the key rate. A decrease could range from 0.5% to 1%. This fact may support the ruble. The next fact to support the ruble is taxes from exporters. It is unlikely that such a volume If the necessary demand is found, which will certainly lead to a strengthening of the ruble. When the level of 57-55 rubles / $ 1 is reached, the Ministry of Finance may again talk about the catastrophic nature of this course. We expect relief from the regulator in terms of capital controls.and put parallel imports in the literal sense on the Russian rails,” says Stepan Sumin, asset manager at Cresco Finance.
Rates on the market for short-term and medium-term (1-6 months) interbank loans mostly fell slightly on Friday relative to the previous trading day. The exception was the overnight MosPrime Rate, which rose by 2 basis points (bp) to 9.49% per annum, while the MosPrime Rate for seven-day loans decreased by 1 bp. – up to 9.52% per annum. The rate for a period of 1 month decreased by 3 bp. – to 9.49% per annum, the rate for a period of 3 months decreased by 2 b.p. – to 9.53% per annum, the rate for a period of 6 months retreated by 7 bp. – up to 9.56% per annum.