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What Helped Russia’s Services PMI See Strong Gains in February?

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Russia’s services PMI in February 2018

According to a report by Markit Economics, Russia’s service PMI (purchasing managers’ index) improved strongly in February 2018. It stood at 56.5 in February as compared to 55.1 in January 2018. The PMI figure met the preliminary market expectation of 56.

The improvement in Russia’s service PMI in February was mainly due to the following factors:

  • Production output and volume rose at a marginally higher rate in February as compared to January 2018.
  • New orders and export orders in the service sector also improved at a faster rate in that month.
  • The employment in the service sector also rose marginally in the same month.

Despite some political instability in Russia, consumer demand in the service sector remained strong in February. However, manufacturing activity weakened during the month. Manufacturing represents an important part of Russia’s economy and exports constitute a major part of its GDP growth. However, the improvement in service activity in Russia is strengthening investors’ confidence in the economy.

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Performance of various ETFs in February

The iShares MSCI Russia Capped ETF (ERUS), which tracks the performance of Russia’s economy (RSX), fell 0.5% in February 2018. The VanEck Vectors Russia Small-Cap ETF (RSXJ) fell 0.6% in the same month. In the next part of this series, we’ll analyze the performance of Brazil’s manufacturing PMI in February 2018.

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