Russia Manufacturing Gauge Tops Forecasts as Ruble Drives Output - Bloomberg

Russian manufacturers reported improving conditions for a fifth month in November, exceeding forecasts by economists as a weaker currency spurred output and pushed input-price growth to the fastest in more than 16 years.

The Russia Manufacturing Purchasing Managers’ Index rose to 51.7, the highest in more than a year, from 50.3 in October, HSBC Holdings Plc said in a statement, citing data compiled by Markit Economics. That exceeded all estimates in a Bloomberg survey of six economists, whose forecasts ranged from 49.9 to 50.2. Readings above 50 indicate expansion.

“Input prices surged at a rate not yet seen in this century,” Alexander Morozov, chief economist for Russia and the Commonwealth of Independent States for HSBC in Moscow, said in the statement. “Manufacturers either benefit from substitution of expensive imports or just misinterpret a temporary spike in demand driven by the increased inflationary expectations.”

President Vladimir Putin is counting on domestic producers taking advantage of the ruble’s record plunge to shield an economy battered by nosediving oil prices and sanctions imposed over the conflict in Ukraine. The surge of input costs raises the likelihood of “double-digit” inflation in the coming months and boosts the case for an increase in interest rates by the central bank, according to HSBC.

The ruble has lost 29 percent against the dollar in the past three months, the worst performer among 24 emerging-market currencies tracked by Bloomberg. A lower exchange rate makes a nation more competitive in selling goods.

Complete story at - Russia Manufacturing Gauge Tops Forecasts as Ruble Drives Output - Bloomberg

Russian news: The Rouble, A Perfect Storm - Russia Insider

The economic sanctions enacted against Russia have proved a spectacular failure, hardening Russian resolve, enhancing Mr Putin’s popularity, but especially, causing greater economic pain to the European Union than to Russia.

Although the Russian market accounts for only a few percent of European GDP, at a time when the EU is teetering on the brink of renewed recession (inter alia, German economic indicators are now falling off a cliff) those few points can spell the difference between muddling-through and collapse.

The tame Western media find themselves desperate to produce a narrative showing the success of the sanctions regime – much as they did for various Washington policy initiatives: from the invasions of Iraq (Mission Accomplished!) and Afghanistan, to the war on “Terror”.

Russian GDP is indeed flat-lining – this predates the sanctions and can be attributed primarily to falling commodity prices and collapsing demand as Russia’s Western export markets slump into recession. If anything, the Russian countersanctions are driving import substitution, providing some support to industrial activity.

The Russian Rouble has depreciated by about 17% against the dollar over the course of 2014, due to a number of factors – the Western sanctions do not happen to being among them:

Complete story at - Russian news: The Rouble, A Perfect Storm - Russia Insider

Bloomberg Lied About the Ruble and Manipulated the Market - Russia Insider

Yesterday Bloomberg ran a piece saying that the Russian Central Bank was considering imposing capital controls.

As a result of the story, the ruble came under heavy selling pressure and the central bank was forced to intervene for the first time in months in the currency market.

Over-night the Central Bank have not only rubbished the claims as pure lies but have opened an investigation into market manipulation. The Russian government has also come out and said that capital controls are completely off the table, and yet, the western media continues to run stories of how Russia is considering imposing them.

There was an excellent piece last week by a colleague of mine on this site on why Russia is bringing in new legislation against foreign media.

Complete story at - Bloomberg Lied About the Ruble and Manipulated the Market - Russia Insider