Expect a small opening gain in the local markets – following the US move – but unlikely to see any major moves in any market today. Investors in all markets are much more focused on the US payroll data tomorrow. The price of WTI for September delivery is at $82.14 p/bbl and Brent was last at $81.93 p/bbl. Both are off approximately 20 cents per barrel. Copper is down 0.5%. More a case of consolidation that anything more significant. The dollar has recovered a little against both the euro and the yen ahead of today’s ECB meeting. The last dollar-euro rate is $1.3161 and the dollar-yen rate is 86.185. The main focus will be on the ECB interest rate meeting and, especially, on comments that the ECB president will make at the press conference. Investors in the US now expect that the Fed will soon inject further stimulus into the economy and that is one of the main reasons for the weaker dollar recently. The market will hope to hear the ECB’s thinking about further stimulus or eventual tightening and, if there is a clear indication, there will be an impact on the dollar-euro rate. That will have a knock-on effect to oil and other commodities and, hence, the ruble. The only other economic report of consequence is the weekly jobless update in the US. South African President Zuma is visiting Moscow today. Apart from cooperation on mining developments and coordination in the diamond market the other topics will probably include the usual statements about currency management amongst the BRIC countries. Otherwise Russia may offer to sell South Africa nuclear power and military hardware. Plus, of course, looking for South Africa’s support for Russia’s bid to host the 2018 World Cup. As the most recent host, South Africa’s support may carry some weight. The ruble also opened a little weaker yesterday. But, as confidence in global markets grew and the price of oil held close to yesterday’s levels, the rate also moved modestly better. The weekly inflation report, although up another 0.1% when it ought to be unchanged (summer usually brings deflation as food becomes cheaper) the year on year rate is well below 6%. The big test will come in September when the effects of the current record heat and forest fires should be felt. Whether it is or not will depend on whatever actions the government takes to force prices low. At the end of the session on MICEX, the ruble was up just 1 basis point against the dollar, at 29.82, and up 6 basis points against the euro, at 39.38. Polyus Gold continues to slide in absolute and relative terms. Apart from the uncertainty surrounding its Kazakhstan interests, the other reason is because it was due to be excluded from the MSCI Russia Index at the end of next week. MSCI has now said that the stock will not be excluded on August 12th, as previously stated, but they will review the situation only in September. That news may help establish some support for the price as index-linked funds will not now have to sell. Our target price is $70 p/s (PLZL RX or $35 p/s for PLZL LI), which implies over 55% upside from here. See separate note issued by our analysts yesterday. If has been confirmed that VTB Bank is in talks with the Kuwait sovereign wealth fund (KIA) about a possible equity stake sale. Nothing very significant in that, albeit it does show that the Finance Ministry is more active with the privatization plan than was indicated last week. It would not be a surprise to hear of similar talks (with such a fund investor) concerning equity in other existing listed state companies. Moscow’s bourses opened yesterday’s session with a dip as a reaction to the weaker Asian markets and the indications of a likely weaker opening in the US markets. Activity was very light – as is usual in the summer weeks – for most of the session, only picking up slightly when traders marked up prices with the US opening gains. Wall Street responded to the better ADP employment report and the better than expected ISM non-manufacturing update. The RTS added 0.4% to close at 1,523.8, while MICEX also closed up 0.4%, at 1,418.1. The stock move of any significance amongst the blue chips was the 4.1% gain for Sberbank Preference shares, probably for no more reason than a trader did the calculation and played the wide spread over commons. Raspadskaya, however, continues to attract buyers and yesterday gained another 3.4%. There has been no news of any significance concerning the stock so the buyer is no doubt hoping that the valuation reflects a worst-case scenario that will not happen. The London GDR market also turned around late in the afternoon and closed up 0.5% for the day. The usual high-beta global stocks led the bounce as a reaction to the better US data. Novolipetsk and Severstal led that theme with respective gains of 3.0% and 2.4%. Novorossiysk was one of the few notable movers, rising 7.4% on small volume. Magnit also attracted buyers and added 3.5% to close at $22.25. Polyus Gold continues to edge lower as uncertainty over its Kazakhstan position remains and ahead of the exclusion of the stock from the MSCI Russia Index at the end of next week. It lost 1.6% to close at $23.57.