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1 Apr 2014
EMEA EM Express:
FXStreet (Łódź) - The situation in Ukraine seems to be de-escalating gradually, as Russia ceased to demonstrate its military force close to Ukraine's borders and President Vladimir Putin assured German Chancellor Angela Merkel during a phone call on Monday that Russian troops would be partially withdrawn from the area.
"On top of that, the two discussed further possible steps to stabilize the situation in Ukraine and Trans-Dniester," according to a ststement released by Merkel's office. Ukranian and US officials remained skeptical about Russia's intentions however, as there was no evidence of troops being withdrawn.
On Tuesday Russian PM Dmitry Medvedev visited the annexed Crimea for a government meeting in a gesture showing that the peninsula has been irreversibly incorporated into the Russian Federation. Medvedev promised to create a special economic zone in Crimea to attract investors and to raise wages and pensions, improve infrastructure, education and healthcare.
Dmitry Polevoy from ING believes that “even though western leaders and the Ukraine government will continue rejecting the legitimacy of the Crimea annexation, no further military activity from the Russian side and hopes on diplomatic efforts in the crisis resolution between the US/EU and Russia should encourage a gradual removal of the geopolitical discount from the value of RUB and Russian assets.”
Meanwhile, Gazprom hiked gas prices for Ukraine by over a third today, from $268.50 to $385.5 per 1,000 cubic metres. According to the energy company, the raise was carried out due to Ukraine's failure to pay its debts. The country is supposed to owe Russia $1.71 bln for gas.
Economic data
Tuesday has been dominated by March PMI releases, which pointed to a slowdown in the manufacturing sector in various EMEA countries. Russia's HSBC Manufacturing PMI dropped slightly from 48.5 to 48.3; in Poland PMI expansion decelerated from 55.9 to 54; in Hungary the decline was from 54.3 to 53.7, while the South African PMI dropped from 51.7 to 50.3.
Also on Tuesday the Russian Federation Federal State Statistics Service released preliminary annual GDP data, which showed an increase to 2%, following a 1.2% rise and exceeding expectations of 1.6% growth.
Furthermore, Turkish exports rose in March to 13.14B dollars from 12.09B dollars in February, TurkStat reported on Tuesday.
As Muammer Komurcuoglu from ING suggests: “The recovery in the EU keeps supporting exports where we expect the net effect to be stronger in time, as long as the EU preserves its ongoing economic growth.”
Technicals
The USD/RUB strengthened by 0.26% to 35.1275 on Monday. The daily FXStreet Trend Index was slightly bearish, and the OB/OS Index oversold. RSI was neutral at 34.9492 at the last close. Daily 2-StDev Volatility Bandwidth was expanding at 3992 pips, with ATR (14) expanding at 4153 pips. The 1D 200 SMA was at 33.4305, while the 1D 20 EMA was at 35.8643.
According to Igor Sayadov from Robo Forex, on Tuesday “the Ruble is still forming a descending structure. We think, today price may reach level of 34.90 and then return to 36.20. Later, in our opinion, instrument may start new descending wave.”
"On top of that, the two discussed further possible steps to stabilize the situation in Ukraine and Trans-Dniester," according to a ststement released by Merkel's office. Ukranian and US officials remained skeptical about Russia's intentions however, as there was no evidence of troops being withdrawn.
On Tuesday Russian PM Dmitry Medvedev visited the annexed Crimea for a government meeting in a gesture showing that the peninsula has been irreversibly incorporated into the Russian Federation. Medvedev promised to create a special economic zone in Crimea to attract investors and to raise wages and pensions, improve infrastructure, education and healthcare.
Dmitry Polevoy from ING believes that “even though western leaders and the Ukraine government will continue rejecting the legitimacy of the Crimea annexation, no further military activity from the Russian side and hopes on diplomatic efforts in the crisis resolution between the US/EU and Russia should encourage a gradual removal of the geopolitical discount from the value of RUB and Russian assets.”
Meanwhile, Gazprom hiked gas prices for Ukraine by over a third today, from $268.50 to $385.5 per 1,000 cubic metres. According to the energy company, the raise was carried out due to Ukraine's failure to pay its debts. The country is supposed to owe Russia $1.71 bln for gas.
Economic data
Tuesday has been dominated by March PMI releases, which pointed to a slowdown in the manufacturing sector in various EMEA countries. Russia's HSBC Manufacturing PMI dropped slightly from 48.5 to 48.3; in Poland PMI expansion decelerated from 55.9 to 54; in Hungary the decline was from 54.3 to 53.7, while the South African PMI dropped from 51.7 to 50.3.
Also on Tuesday the Russian Federation Federal State Statistics Service released preliminary annual GDP data, which showed an increase to 2%, following a 1.2% rise and exceeding expectations of 1.6% growth.
Furthermore, Turkish exports rose in March to 13.14B dollars from 12.09B dollars in February, TurkStat reported on Tuesday.
As Muammer Komurcuoglu from ING suggests: “The recovery in the EU keeps supporting exports where we expect the net effect to be stronger in time, as long as the EU preserves its ongoing economic growth.”
Technicals
The USD/RUB strengthened by 0.26% to 35.1275 on Monday. The daily FXStreet Trend Index was slightly bearish, and the OB/OS Index oversold. RSI was neutral at 34.9492 at the last close. Daily 2-StDev Volatility Bandwidth was expanding at 3992 pips, with ATR (14) expanding at 4153 pips. The 1D 200 SMA was at 33.4305, while the 1D 20 EMA was at 35.8643.
According to Igor Sayadov from Robo Forex, on Tuesday “the Ruble is still forming a descending structure. We think, today price may reach level of 34.90 and then return to 36.20. Later, in our opinion, instrument may start new descending wave.”