The Russian economy is expanding again.

The Russian ruble stabilized at around 91.35 rubles per US dollar due to concerns about the downturn in the United States and Europe. Additionally, the recent increase in oil prices has had a positive impact on Russia's exports. Furthermore, there has been an influx of foreign currency from the country's main sources of income. Fundamentally, the ruble is still supported by high-interest rates and increased government spending.

The Central Bank of Russia (CBR) has kept its policy interest rate at 16% following the latest meeting in February, which aligns with market expectations. This marks the first halt in interest rate hikes after an 850 basis point increase since July 2023. The CBR noted that inflationary pressures have eased since the fourth quarter of the previous year.

The CBR expects inflation to fall below 4.5% this year and reach the target of 4% next year. However, policymakers have observed that despite the easing inflationary pressures, risks remain due to ongoing economic support and domestic stimulus, as evidenced by GDP growth of 3.6% in 2023, significantly exceeding the central bank's projections.

Russia's Manufacturing Purchasing Managers' Index (PMI) increased to 54.7 in February, indicating continued expansion in the manufacturing sector supported by rapidly increasing new orders and a rebound in hiring. Nevertheless, there are still challenges from rising raw material costs, transportation expenses, and supplier prices. Confidence has risen to a seven-month high, driven by expectations of increased investment and additional new orders.

Real wages in Russia increased by 8.5% year-on-year in December, marking the 15th consecutive month of real wage growth, driven by increased inflation and expansion in the manufacturing sector, leading to increased labor demand.

Russia's unemployment rate dropped to a record low of 2.9% in January, primarily due to skilled labor shortages resulting from internal migration and the mobilization of people for war in Ukraine, leading to a decrease of 139,000 unemployed individuals from the previous month. Additionally, the expanding economy, supported by government intervention, has led to increased employment across multiple industries.

Techical analysis data (5H)

Resistance: 91.4894, 91.6197, 91.7394

Source: Investing.com

Buy/Long 1: If the price touches support in the price range of 91.1197 - 91.2394 but cannot break the support at 91.2394, you may set a TP at approximately 91.6197 and SL at around 90.9894 or according to your acceptable risk.

Buy/Long 2: If the price breaks the resistance in the price range of 91.4894 - 91.6197, you may set a TP at approximately 91.7394 and SL at around 91.1197 or according to your acceptable risk.

Sell/Short 1: If the price touches resistance in the price range of 91.4894 - 91.6197 but cannot break the resistance at 91.4894, you may set a TP at approximately 91.1197 and SL at around 91.7394 or according to your acceptable risk.

Sell/Short 2: If the price breaks the support in the price range of 91.1197 - 91.2394, you may set a TP at approximately 90.9894 and SL at around 91.6197 or according to your acceptable risk.

Pivot point March 5, 2024 02:24 PM. GMT+7