Waiting for a new cabinet. Politics and economics will share the headlines and investor interest in Russia this week. Some media outlets in Moscow report that Prime Minister Dmitri Medvedev may present the new cabinet line-up to President Vladimir Putin this week, while others speculate it will be only after Medvedev returns from the G-8 meeting. By law, the deadline for confirming the new cabinet is May 22 The other main event tomorrow is the spring rebalancing of MSCI indexes, which takes place tomorrow after the US markets close. It is expected that there will be a number of changes to the structure of the MSCI Russia Index.

Oil is heading lower. The price of Brent is trading lower again this morning and is in danger of heading toward the $100/bbl level that Saudi Arabia's oil minister is advocating as optimal for both producers and consumers. While the journey toward $100/bbl Brent is damaging to investor sentiment toward Russian assets, that price is also optimal for the Russia investment case. While weaker oil seems inevitable, the conditions for a price crash much below $100/bbl are absent. A weaker oil price of course also means a weaker ruble-dollar rate.

Chris Weafer