Ruble and RTS: between Biden and Lukashenko

Ruble and RTS: between Biden and Lukashenko

Ruble and RTS: between Biden and Lukashenko – Again, as if there weren't those nasty ten days – most markets are in the green. In particular, the futures on the S&P 500 at about 16 hours Moscow time quite abruptly moved from the level of 3360 p. To 3390 p. More than 1.8% growth is a serious claim for a new race for records. However, at 20.30 Moscow time, futures were already at the level of 3370 p., And the rainbow in the eyes of investors became rather ghostly.

Of course, there are reasons for positive: Pfizer promises well to release the coronavirus vaccine on the market by the end of the year. It seems that a compromise solution has been found with the American business TikTok: there will be no direct forced sale, but the case will partially go to Oracle – investors were so inspired that trading in shares of the latter was even stopped today. Finally, Amazon (NASDAQ: AMZN), which so far has not been particularly pleased, announced the hiring of another 100 thousand people in the US and Canada.

Finally, speculators can count on the next two-day meeting of the Federal Reserve Committee on Open Markets, which starts tomorrow: they are unlikely to say something that could collapse the market – certainly not for the elections.

“The Fed's leadership is more likely to repeat the theses recently voiced in Jackson Hall by its leader Jerome Powell: despite the possible acceleration of inflation, they will maintain low rates. If there was an excessive negative on the market, there could be additional verbal interventions, but for now, it seems, you can do without it, – says the investment strategist of MC Arikapital Sergey Suverov. – As already mentioned, there is no news reason for a full correction yet. So it is possible that the growth continues, but given the high volatility, private investors will become more cautious, so the growth will not be stable, we will face consolidation. Joe Biden's probable victory still worries the markets, he is forced to play on the left field, and this chills investors. ”

But on the oil market, the depression continues, which began at the end of August – and now the futures for a barrel of Brent are stably below $ 40.

In a new monthly review, OPEC again lowered its forecast for average demand for 2020 from 90.63 million barrels per day to 90.23 million. At the same time, the expected average decline in non-OPEC production was reduced from 3.1 million to 2.7 million, and The cartel countries themselves are reported to have increased their average daily production by 760,000 barrels in August. Demand growth expectations for next year have been reduced from 7 million to 6.62 million barrels per day. In sum, this may mean a further shift in the balance of up to 3% in favor of overproduction – which, for the existing price elasticity, may mean an absolutely arbitrary decline in prices, including one comparable to that observed in the spring.

And, in fact, Bloomberg already reports that in addition to Saudi Arabia, its neighbors are also involved in the price war: Iraq, the UAE, Kuwait and Qatar have announced new discounts.

In Russia today, the Moscow Exchange index during the main trading session increased by 0.61%, the RTS index – by 0.44%. During the day, the market went into negative territory, with the appearance of good news from Europe and the USA, it recaptured losses and went into positive territory, but from 17.20 Moscow time the growth stopped. The ruble is also weakening today, albeit slightly – by 21.30 Moscow time, the dollar rate increased by only 20 kopecks. up to RUB 75.25

The story of the poisoning of Alexei Navalny is developing: as a result of repeated studies, the fact of using a substance from the Novichok group was confirmed by laboratories in France and Sweden.

Also today in Sochi, President Vladimir Putin met with Alexander Lukashenko, who holds a similar position in Belarus. The main outcome of the meeting was the promise of a $ 1.5 billion loan. The return of this money is a different story: today the S&P rating agency, having kept the sovereign rating of Belarus at the non-investment level “B”, changed its outlook to “negative”. Most of these funds, at best, will be used to refinance existing debt of $ 1 billion – not counting the $ 300 million that Belarus must repay in order to continue receiving gas in 2021.

The amount bargained for raises a number of associations – for example, it is comparable to the reduction in Belarus' gold and foreign exchange reserves in August. You can also recall that in December 2013, at a similar meeting, the then President of Ukraine Viktor Yanukovych received $ 3 billion. But, at least, it can be noted that $ 1.5 billion is an order of magnitude less than the expenses of the Russian budget for eliminating the consequences of the coronavirus pandemic.

“There were expectations of the announcement of“ closer integration ”, but they were limited to economic agreements. The main thing is that there will be no forceful participation of Russia in the resolution of the post-election conflict, and this is rather a positive signal for investors, – continues Sergey Suverov. – In general, we observe the same trends in the market as in the whole world: consolidation and volatility, there is no trend. There are no positive signals for the ruble, oil is cheaper than $ 40. Political risks in connection with Belarus have diminished, but the Navalny case and the expectation of the same Biden victory remain. So we, too, are likely to remain flat in the near future – both on the RTS and on the ruble ”.

(Text prepared by Daniil Zhelobanov)

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