13 May 2014
EMEA EM Express: Tensions persist in eastern Ukraine, Gazprom asks Kiev to pay for gas in advance
FXStreet (Łódź) - Following the weekend referendums in Donetsk and Luhansk in eastern Ukraine, the outcome of which showed the regions' support for succession, Russian President Vladimir Putin urged Kiev to respect the results. But neither Ukraine nor the EU have recognized the legitimacy of the referendum.
Furthermore, the the self-proclaimed Donetsk People’s Republic announced on Tuesday that in case of Ukrainian authorities' unwillingness to withdraw forces from the region, it would declare war against them.
Meanwhile, Gazprom said on Tuesday that Ukraine should pay its June gas bill amounting to 1.66 billion dollars in advance, by June 2 or the supplies would be cut the following day.
Gazprom's spokesman Sergey Kupriyanov assured that such a solution was in line with a 2009 contract.
Economic data
Hungary released inflation data on Tuesday. On an annual basis CPI fell 0.1% in April, following +0.1% in March and against forecasts of rising 0.2%. Core inflation growth slowed down to 2.4% from 2.7% seen previously.
Russian Trade Balance numbers, published on Monday showed a widening of the USD 12.43B surplus recorded in February to a USD 19.72B surplus in March, above expectations of USD 19.20B.
Romania's trade balance, also released on Monday stood at EUR -0.551B in March, widening from EUR -0.315B. In the opinion of Mihai Tantaru from ING: “Coupled with strong dynamics in industrial output, external trade suggests the private consumption recovery is taking hold.”
Israel's Central bureau of statistics said on Tuesday that the country's trade deficit of USD -1,352.7M seen in March widened to USD -2,205.5M in April.
Meanwhile, Turkey's Current Account deficit remained unchanged in March at USD-3.19B, as expected.
“This lowers the 12-month total deficit to around -$60 bln, the lowest since September 2013,” the BBH Global Currency Strategy Team point out. “Still, improvement in the external accounts is being largely driven by contracting imports as the economy slows.”
Technicals
The Russian ruble was rising on Tuesday as fears of the West imposing more severe sanctions against Russia dissipated. The currency strengthened 0.8% to 40.6812 against the central bank’s target dollar-euro basket in afternoon trading. USD/RUB was falling 0.67% at 34.7766 at the moment of writing.
On Monday the USD/RUB daily FXStreet Trend Index was slightly bearish, with the OB/OS Index neutral. RSI was at 32 at the last close, and so far remained unchanged. Daily 2-StDev Volatility Bandwidth was expanding at 3361 pips, with ATR (14) expanding at 3547 pips. The 1D 200 SMA was at 33.8495, while the 1D 20 EMA was at 35.5006.
Meanwhile, the Polish zloty was up 0.26% at 3.0470 on Tuesday. On Monday the USD/PLN daily FXStreet Trend Index was slightly bullish, with the OB/OS Index neutral. RSI was at 55 at the last close, and has risen to 56 so far today. Daily 2-StDev Volatility Bandwidth was shrinking at 81 pips, with ATR (14) expanding at 177 pips. The 1D 200 SMA was at 3.0796, while the 1D 20 EMA was at 3.0292.
According to Bill Hubard, Chief Economist at Markets.com: “PLN price action continues to be driven by flows we see from corporates which continue to buy USD/PLN at these levels. Although corporate activity has increased in the previous few weeks, this is more a function of RM investors not participating in recent flows. We have seen leveraged inflows over the past month increase in PLN, and as sentiment continues to improve in EM and RM investors begin to put cash to work, we feel a good fundamental story like PLN could benefit further.”
Furthermore, the the self-proclaimed Donetsk People’s Republic announced on Tuesday that in case of Ukrainian authorities' unwillingness to withdraw forces from the region, it would declare war against them.
Meanwhile, Gazprom said on Tuesday that Ukraine should pay its June gas bill amounting to 1.66 billion dollars in advance, by June 2 or the supplies would be cut the following day.
Gazprom's spokesman Sergey Kupriyanov assured that such a solution was in line with a 2009 contract.
Economic data
Hungary released inflation data on Tuesday. On an annual basis CPI fell 0.1% in April, following +0.1% in March and against forecasts of rising 0.2%. Core inflation growth slowed down to 2.4% from 2.7% seen previously.
Russian Trade Balance numbers, published on Monday showed a widening of the USD 12.43B surplus recorded in February to a USD 19.72B surplus in March, above expectations of USD 19.20B.
Romania's trade balance, also released on Monday stood at EUR -0.551B in March, widening from EUR -0.315B. In the opinion of Mihai Tantaru from ING: “Coupled with strong dynamics in industrial output, external trade suggests the private consumption recovery is taking hold.”
Israel's Central bureau of statistics said on Tuesday that the country's trade deficit of USD -1,352.7M seen in March widened to USD -2,205.5M in April.
Meanwhile, Turkey's Current Account deficit remained unchanged in March at USD-3.19B, as expected.
“This lowers the 12-month total deficit to around -$60 bln, the lowest since September 2013,” the BBH Global Currency Strategy Team point out. “Still, improvement in the external accounts is being largely driven by contracting imports as the economy slows.”
Technicals
The Russian ruble was rising on Tuesday as fears of the West imposing more severe sanctions against Russia dissipated. The currency strengthened 0.8% to 40.6812 against the central bank’s target dollar-euro basket in afternoon trading. USD/RUB was falling 0.67% at 34.7766 at the moment of writing.
On Monday the USD/RUB daily FXStreet Trend Index was slightly bearish, with the OB/OS Index neutral. RSI was at 32 at the last close, and so far remained unchanged. Daily 2-StDev Volatility Bandwidth was expanding at 3361 pips, with ATR (14) expanding at 3547 pips. The 1D 200 SMA was at 33.8495, while the 1D 20 EMA was at 35.5006.
Meanwhile, the Polish zloty was up 0.26% at 3.0470 on Tuesday. On Monday the USD/PLN daily FXStreet Trend Index was slightly bullish, with the OB/OS Index neutral. RSI was at 55 at the last close, and has risen to 56 so far today. Daily 2-StDev Volatility Bandwidth was shrinking at 81 pips, with ATR (14) expanding at 177 pips. The 1D 200 SMA was at 3.0796, while the 1D 20 EMA was at 3.0292.
According to Bill Hubard, Chief Economist at Markets.com: “PLN price action continues to be driven by flows we see from corporates which continue to buy USD/PLN at these levels. Although corporate activity has increased in the previous few weeks, this is more a function of RM investors not participating in recent flows. We have seen leveraged inflows over the past month increase in PLN, and as sentiment continues to improve in EM and RM investors begin to put cash to work, we feel a good fundamental story like PLN could benefit further.”