When the entire financial market is obsessed with Jackson Hole, why shouldn't the ruble take a deep dive into the hot topic? It has become clear that Jerome Powell will not announce a QE tapering. He is optimistic about the US economy and his lack of fear of the Delta could strengthen the US dollar as the risks of the Fed ceasing its quantitative easing program soon may increase.

As the global economy moves from the beginning of the recovery to its normal state, monetary policy normalization becomes a must. COVID-19 is unlikely to stop this process. However, the Fed's withdrawal of monetary stimulus is likely to occur at a snail's pace. The central bank balance sheet will continue to exceed $8 trillion, the proceeds from expired bonds will continue to be reinvested, which will keep debt yields low. This is good news not only for the US but for the entire global stock market.

Goldman Sachs and Bank of America believe we should pay attention to undervaluation in such circumstances. Over the 10 years since the previous economic crisis, the emerging market stock index has risen a modest 8%, while the developed market index has doubled. Since the beginning of 2021, the numbers are also strikingly different: +4% and +16%, respectively. As a result, the ratio of the EM index to the global index has collapsed to its lowest level in the last 20 years.

Indices ratio dynamics

The undervaluation may be beneficial for shares of the Russian energy sector, but banks and companies of other sectors are also quite possible to improve. The capital inflow to Russia is highly likely to strengthen the ruble.

While the S&P 500 continues to rally and US Treasury yields are depressed, it is too early for the USD/RUB bears to throw in the white flag. This is applicable even amid the growing risks of the Fed normalizing monetary policy and the Delta spreading across the world. After all, the Bank of Russia is pursuing a much more aggressive monetary restriction than its US counterpart.

Another reason to sell the USD/RUB could be the recovery of the bullish trend for oil. China's example of coping very quickly with the COVID-19 outbreak is highly enlightening. One cannot exclude the possibility that Beijing will increase incentives to increase the activity of the population frightened by the coronavirus. The acceleration of Chinese GDP over the rest of the year is a bright sign for emerging market currencies, crude oil, and the ruble.

Therefore, the imminent future of the pair is in the hands of the Fed Chairman. His speech in Jackson Hole is likely to support the USD. However, the outlook for the ruble is by no means hopeless, which allows to sell the USD/RUB during the rise.

The technically analyzed pair is trading close to the fair value at 74.2, which experienced a pullback after an unsuccessful bullish assault. If bulls fail again or break away from the resistance at 74.55 and 74.8, this will be a reason to sell the USD/RUB.

USD/RUB intraday chart