Russian Unemployment Down Nearly 30% Since Financial Crisis, Down 0.80% Month-to-Month

On Tuesday, Russia's unemployment rate came in very favorably at 6.4%, crushing analysts expectations of 7.0%, according to Bloomberg. Russia's unemployment rate has not been this low since September 2008. At the end of 2009, Russia's unemployment was well over 10%. Domestic demand has been steadily increasing in Russia's domestic markets, which may have led to increased capital investment in the BRIC country. Fixed capital investment is up 7.4% year-over-year.

is a major exporter of crude oil. The strength of Russia's economy may correspond strongly to the price of oil. Crude oil was down significantly in 2009, as fears of a global depression dampened demand for the industrial commodity. Since then, oil has been rallying in price, and though the price of oil is near 50% off its highs, the gradual run-up in the price of oil may be heavily contributing to Russia's economic growth. Perhaps validating this line of reasoning is a similar phenomenon in the oil-exporting country of Canada. Granted, Canada's recovery has not been as pronounced as Russia's, but the countries have followed a nearly identical pattern in their unemployment rates. Canada's unemployment rate spiked in 2009, before gradually falling near 7.0% in recent months. Canada's recovery may be dampened by its ties to the United States. The United States is Canada's largest trading parter, and the vast majority of Canada's exports go to the United States. Russia has a similar relationship, but not to the United States. Rather, Russia's energy exports largely flow to Europe. This is interesting because the continuing

in Greece may spillover to Russia. Commentators have cited a financial contagion affecting other European Union member states. However, the impact Greece would have on Russia has been largely ignored. Should Greece default and bring down the economies of the European Union, Russia may suffer severely as demand for its oil plunges on European weakness. Still, for the time being, Russia's economy appears to be a great growth story.

Traders who believe that the Russia economy grows from here might want to consider the following trades:

Traders who believe that problems in Europe may dampen Russian recovery may consider taking positions in the following: