Russia's capital expenditure taking break

The Russian Composite PMI for June fell below the critical 50 mark to 49.5 (vs 51.6 in May). 

Although capital investment is subject to unpredictable month-on-month swings as a result of the implementation of large projects, investment demand in Russia is still being pressured by overall uncertainty. Oil prices fell in June, raising concerns about the sustainability of income recovery in the near term as well as impairing corporate confidence in the recovery of internal demand. 

Some scope for fixed-asset investment to recover in June is seen, and it is expected to print at -7.5% yoy, outperforming the market consensus of -8.2% yoy, states Societe Generale.