A Closer Look at Key Global Foreign Exchange Indicators
The ruble and crude oil prices
The Russian ruble appreciated versus the US dollar on November 19, 2015, even as retail sales contracted on an annual basis in October. The strength in the ruble was driven by a rally in crude prices as crude oil futures for Jan 16 ended the day on a positive note by almost 3%. Inventories in terms of US oil stockpiles rose by around 0.25 million, below forecasts, culminating an upward sentiment for global oil prices on November 19.
The week before, the ruble exhibited sharp depreciation on contraction in the Russia’s gross domestic product. For more on that, please refer to the article on how the Russian Ruble Fell as the GDP Reported an Economic Contraction.
Retail sales fall below forecasts
Retail sales on a YoY (year-over-year) basis fell by 11.7% in October against a fall of 10.4% in the previous month and released below the forecasts of a contraction of 9.6%. Real wage growth also fell annually by 10.9% against a fall of 10.4% in September. On the other hand, producer prices rose annually by 14.2% in October versus a rise of 12.7% in the previous month. On a monthly basis, producer prices rose by 1.8% against a fall of 1.1% last month.
Impact on the market
ETFs were following a negative trajectory on November 19, 2015. The Market Vectors Russia ETF (RSX) provides exposure to companies that are publicly traded and domiciled in Russia. It fell by 0.96%. The iShares MSCI Russia Capped Index Fund (ERUS) fell by 0.59%.
The negative trend was not evident in Russian ADRs, short for American depositary receipts. Mobile TeleSystems (MBT) rose by 0.41%. On the other hand, the energy-related ADR Canadian Natural Resources (CNQ) fell by 0.32%. Also, Baytex Energy (BTE) traded negative by 6.33%.
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