Russia's sanctions may be lifted following U.S. negotiations.

The Russian ruble has remained stable amid speculation that sanctions on Russia may be lifted. This follows President Donald Trump's decision to engage in negotiations with Vladimir Putin in an effort to de-escalate the ongoing war between Russia and Ukraine. Additionally, the U.S. may restore economic relations with Moscow if the talks proceed successfully. The temporary halt in hostilities has also fueled expectations that the war could end soon, contributing to the recent appreciation of the ruble. Investors are hopeful that Russia may soon reintegrate into global trade and investment. Meanwhile, the Central Bank of Russia has maintained its interest rate at 21%, the highest level in history, during its February meeting. The bank may raise rates further if inflation remains high.

Russia's inflation rate rose to 10.1% year-on-year in February, up from 9.9% in the previous month, aligning with market expectations. This marks the highest inflation rate since 2023, driven largely by rising food prices, which surged by 11.7% after increasing 11.1% in January. The sharpest price hikes were seen in frozen food, vegetables, and fruits, which climbed more than 20%. Additionally, service sector inflation jumped to 12.7%, increasing overall inflationary pressures in the economy.

The Russian federal government reported a budget deficit of 2.7 trillion rubles in the first two months of the year, equivalent to 1.3% of GDP. Preliminary data indicate that government spending rose by 30.6% year-on-year to 8.05 trillion rubles during this period, while revenue grew modestly by 6.3% to 5.34 trillion rubles. Most of Russia’s revenue continues to come from oil and gas sales, with non-oil revenues seeing only slight growth. Russia is expected to further increase its fiscal deficit in the next quarter to support military efforts.

Russia's services sector PMI fell to 50.5 in February from a 12-month high of 54.8 in January. The latest figure represents the slowest expansion in a year due to weakening growth in new orders. Meanwhile, output increased only slightly. Employment rose as firms sought to address high levels of backlogged work and production constraints. Input cost inflation significantly declined as businesses sought to boost sales, leading to a slowdown in overall costs from their 12-month peak. However, business confidence remains positive due to strong demand expectations.

Russia's manufacturing PMI dropped to 50.2 in February after reaching 53.1 in January. Growth was minimal as factory activity contracted due to a sharp slowdown in output and stable new order volumes. As a result, companies reduced purchasing activity for the first time in two years. Employment in the sector continued to decline as firms sought to manage production costs effectively.

Techical analysis data (5H)

Resistance: 87.0433, 87.6451, 88.1334

Source: Investing.com

Buy/Long 1: If the price touches support in the price range of 85.4649 - 85.9532 but cannot break the support at 85.9532, you may set a TP at approximately 87.6451 and SL at around 84.863 or according to your acceptable risk.

Buy/Long 2: If the price breaks the resistance in the price range of 87.0433 - 87.6451, you may set a TP at approximately 88.1334 and SL at around 85.4649 or according to your acceptable risk.

Sell/Short 1: If the price touches resistance in the price range of 87.0433 - 87.6451 but cannot break the resistance at 87.0433, you may set a TP at approximately 85.4649 and SL at around 88.1334 or according to your acceptable risk.

Sell/Short 2: If the price breaks the support in the price range of 85.4649 - 85.9532, you may set a TP at approximately 84.863 and SL at around 87.6451 or according to your acceptable risk.

Pivot point March 13, 2025 10:10 PM. GMT+7