Business

USD/RUB: Strap yourself in and Hold on Tight

USD/RUB: Since February, Russia has been all over the media, one could not fail to notice. The same can be said about its currency. At any rate, almost every person around the globe is aware of what’s been going on. Speaking of the rate, let’s take a look at the dollar-to-ruble pairing.

When diving into the history of the USD/RUB rate over the last ten years, one may notice a consistent pattern of price movements correlated with oil prices. It should come as no surprise, because Russia is the world’s third-largest oil producer after the US and Saudi Arabia, and the largest oil exporter of petroleum products. Revenues from oil and gas sales are the largest source of income from foreign trade operations in Russia.

Following the events of February 2022 the US and its European allies imposed economic sanctions on Russia including a price cap on Russian oil which went live this month. Taking into account that Europe is heavily dependent on Russian energy and the main market for oil exports, these can be considered as some of the most severe measures. The agreement states a maximum of $60 per barrel on Russian seaborne oil. Some European countries, like Poland and the Baltic States (Estonia, Latvia and Lithuania), wanted to go after Russian income more aggressively by setting a much lower price cap.

When it comes to practice, it is important to realize that the ban applies not so much to the purchase of oil and petroleum products in Russia as it does to their insurance and transportation by sea. The reason the US and its partners think it could work is that Russia wouldn’t be able to find an alternative to London insurers and Greek ships very easily.

In retaliation, Russia refused to supply oil to the countries that supported the price cap, refocusing on partners that adhere to the market pricing policy. Russia has seen an increase in demand from Asian countries, notably India and China, due to the market discounts on Russian crude. The Bank of Russia’s trade statistics revealed that the value of Russian exports in the first nine months of 2022 exceeded the value from the corresponding period a year ago. Not to lose track of events affecting the market, which this year have been enough to sink a battleship, most traders use an economic calendar.

Despite the sanctions placed on Russia by the West, the ruble managed to become one of the top-performing currencies around the globe. The USD/RUB pair has been volatile over the year. USD/RUB rates surged over 36% in February 2022 going up to its highest-ever of 154 in March. The Russian government imposed capital controls to protect its currency, which led to USD/RUB rates retreating, followed by USD falling by more than 20% against RUB. Currently, the loss is around 13%.

Unlike most of the currencies that were severely hit by the Fed’s aggressive rate hikes, Russia’s emergency measures managed to shelter its economy from blows. Demand to pay for imports in the Russian national currency has also created extra demand for ruble. Some may call the Russian currency strength artificial. That may be true, but the outcome is the same as long as it is stabilizing its economy.

What’s to expect from this dynamic duo next year? The EU ban on Russian crude oil and refined products coming into force will definitely have its effect. Even though there are buyers willing to pick up discounted Russian oil, they will most likely confront restrictions, the logical conclusion of which is Russian oil supply falling over the course of 2023. This will backfire not only on Russia, but will lead to the whole oil market being tighter.

The Bank of Russia forecasted a recession in the country and expected positive GDP growth to start from the second half of 2023 at the earliest. The long-term dollar to ruble forecast says that in the same period next year, USD/RUB is expected to trade at above 80 and get back to 60 by 2025 at the earliest.

We ask you not to take this market analysis as a call for action. Forecasts can be wrong and before stepping into trade you should always conduct your own research. This is rule # 1, and it must never be forgotten.

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Business

PepsiCo Reduces Revenue Projections As North American Snacks And Key International Markets Underperform.

(VOR News) – In the third quarter of this year, Pepsi’s net income was $2.93 billion, which is equivalent to $2.13 per share. This was attributed to the company.

This is in stark contrast to net income of $3.09 billion, which is equivalent to $2.24 per share, during the same period in the previous year. The company’s earnings per share were $2.31 when expenses were excluded.

Net sales decreased by 0.6%, totaling $23.32 billion. Organic sales increased by 1.3% during the quarter when the effects of acquisitions, divestitures, and currency changes are excluded.

Pepsi’s beverage sales fell this quarter.

The most recent report indicates that the beverage and food sectors of the organization experienced a 2% decline in volume. Consumers of all income levels are demonstrating a change in their purchasing habits, as indicated by CEOs’ statements from the previous quarter.

Pepsi’s entire volume was adversely affected by the lackluster demand they encountered in North America. An increasing number of Americans are becoming more frugal, reducing the number of snacks they ingest, and reducing the number of times they purchase at convenience stores.

Furthermore, Laguarta observed that the increase in sales was partially attributed to the election that occurred in Mexico during the month of June.

The most significant decrease in volume was experienced by Quaker Foods North America, which was 13%. In December, the company announced its initial recall in response to a potential salmonella infection.

Due to the probability of an illness, the recall was extended in January. Pepsi officially closed a plant that was implicated in the recalls in June, despite the fact that manufacturing had already been halted.

Jamie Caulfield, the Chief Financial Officer of Pepsi and Laguarta, has indicated that the recalls are beginning to have a lessening effect.

Frito-Lay experienced a 1.5% decline in volume in North America. The company has been striving to improve the value it offers to consumers and the accessibility of its snack line, which includes SunChips, Cheetos, and Stacy’s pita chips, in the retail establishments where it is sold.

Despite the fact that the category as a whole has slowed down in comparison to the results of previous years, the level of activity within the division is progressively increasing.

Pepsi executives issued a statement in which they stated that “Salty and savory snacks have underperformed year-to-date after outperforming packaged food categories in previous years.”

Pepsi will spend more on Doritos and Tostitos in the fall and winter before football season.

The company is currently promoting incentive packets for Tostitos and Ruffles, which contain twenty percent more chips than the standard package.

Pepsi is expanding its product line in order to more effectively target individuals who are health-conscious. The business announced its intention to acquire Siete Foods for a total of $1.2 billion approximately one week ago. The restaurant serves Mexican-American cuisine, which is typically modified to meet the dietary needs of a diverse clientele.

The beverage segment of Pepsi in North America experienced a three percent decrease in volume. Despite the fact that the demand for energy drinks, such as Pepsi’s Rockstar, has decreased as a result of consumers visiting convenience stores, the sales of well-known brands such as Gatorade and Pepsi have seen an increase throughout the quarter.

Laguarta expressed his opinion to the analysts during the company’s conference call, asserting, “I am of the opinion that it is a component of the economic cycle that we are currently experiencing, and that it will reverse itself in the future, once consumers feel better.”

Additionally, it has been noted that the food and beverage markets of South Asia, the Middle East, Latin America, and Africa have experienced a decline in sales volume. The company cut its forecast for organic revenue for the entire year on Tuesday due to the business’s second consecutive quarter of lower-than-anticipated sales.

The company’s performance during the quarter was adversely affected by the Quaker Foods North America recalls, the decrease in demand in the United States, and the interruptions that occurred in specific international markets, as per the statements made by Chief Executive Officer Ramon Laguarta.

Pepsi has revised its forecast for organic sales in 2024, shifting from a 4% growth rate to a low single-digit growth rate. The company reiterated its expectation that the core constant currency profitability per share will increase by a minimum of 8% in comparison to the previous year.

The company’s shares declined by less than one percent during premarket trading. The following discrepancies between the company’s report and the projections of Wall Street were identified by LSEG in a survey of analysts:

SOURCE: CNBC

Business

Old National Bank And Infosys Broaden Their Strategic Partnership.

(VOR News) – Old National Bank, a commercial bank with its headquarters in the Midwest, and Infosys, a firm that specializes in information technology, have recently entered into a strategic expansion of their link, which has been in place for the past four years.

This expansion is more likely to take place sooner rather than later, with the likelihood being higher.

For the purpose of making it possible for Old National Bank to make use of the services, solutions, and platforms that are offered by Infosys, the objective of this expansion is to make it possible for the bank to transform its operations and processes through the application of automation and GenAI, as well as to change significant business areas.

This lets the bank leverage Infosys’ services, solutions, and platforms.

Old National Bank Chairman and CEO Jim Ryan said, “At Old National, we are committed to creating exceptional experiences for both our customers and our fellow employees.”

This statement is applicable to Old National Bank. Infosys is carefully managing the business process innovations that it is putting us through, putting a strong emphasis on efficiency and value growth throughout the process to ensure that it is carried out efficiently.

This is a routine occurrence throughout the entire operation. Because of Infosys’ dedication to our development and success, we are incredibly appreciative of the assistance they have provided.

Old National has been receiving assistance from Infosys in the process of updating its digital environment since the year 2020, according to the aforementioned company.

Ever since that time, the company has been providing assistance. The provision of this assistance has been accomplished through the utilization of a model that is not only powerful but also capable of functioning on its own power.

Infosys currently ranks Old National thirty-first out of the top thirty US banks.

This ranking is based on the fact that Old National is the nation’s largest banking corporation.

It is estimated that the total value of the company’s assets is approximately fifty-three billion dollars, while the assets that are currently being managed by the organization are valued at thirty billion dollars.

Dennis Gada, the Executive Vice President and Global Head of Banking and Financial Services, stated that “Old National Bank and Infosys possess a robust cultural and strategic alignment in the development, management, and enhancement of enterprise-scale solutions to transform the bank’s operations and facilitate growth.”

This remark referenced the exceptional cultural and strategic synergy between the two organizations. Dennis Gada is the one who asserted this claim. This was articulated explicitly concerning the exceptional cultural congruence and strategy alignment of the two organizations.

We are pleased to announce that the implementation of Infosys Topaz will substantially expedite the transformation of Old National Bank’s business processes and customer service protocols. We are exceedingly enthusiastic about this matter. We are quite thrilled about this specific component of the scenario.

Medium-sized banks operating regionally will continue to benefit from our substantial expertise in the sector, technology, and operations. This specific market segment of Infosys will persist in benefiting from our extensive experience. This phenomenon will enable this market sector to sustain substantial growth and efficiency benefits.

SOURCE: THBL

Business

American Water, The Largest Water Utility In US, Is Targeted By A Cyberattack

The largest regulated water and wastewater utility company in the United States stated Monday that it had been the target of a cyberattack, forcing the company to halt invoicing to consumers.

American Water, The Largest Water Utility In US, Is Targeted By A Cyberattack

American Water, based in New Jersey and serving over 14 million people in 14 states and 18 military facilities, said it learned of the unauthorized activity on Thursday and quickly took precautions, including shutting down certain systems. The business does not believe the attack had an impact on its facilities or operations and said employees were working “around the clock” to determine the origin and scale of the attack.

water

The corporation stated that it has alerted legal enforcement and is cooperating with them. It also stated that consumers will not be charged late fees while its systems are unavailable.

According to their website, American Water operates over 500 water and wastewater systems in around 1,700 communities across California, Georgia, Hawaii, Illinois, Indiana, Iowa, Kentucky, Maryland, Missouri, New Jersey, Pennsylvania, Tennessee, Virginia, and West Virginia.

SOURCE | AP