Oil and the ruble – decided to take a breather

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Oil – and behind it the Russian ruble decided to take a breather, and the fact that the Russian currency is already a week trading in a narrow corridor 65,35-65,70 per dollar, in our view, speaks of the formation of a new medium-term equilibrium level, which may last either until the new announcement of the anti-Russian sanctions (in the near future they are unlikely to come from overseas, as the White house gave himself without reserve to the preparation for the November Congressional elections), or until some news from the fronts of the de-dollarization of the economy and/or the filling dollars of the Russian reserve funds.
Additional factors of de-dollarization – the news on the reduction by Russia of the US national debt reserves to $ 14 billion of their total $460 billion as well as the statement of Deputy Finance Minister Storchak intention to refrain from issuing new dollar-denominated Eurobonds in 2019, as we wrote earlier.
Thus, the Euro-ruble is trading today, virtually unchanged since opening at the level just below 75,70.
Speaking of oil, the stabilization occurred against the backdrop of a clear understanding of the markets the fact that, despite the horrifying details emerged of the disappearance of the opposition in Ankara, a Saudi journalist who had a passport of a citizen of the United States, further escalation of confrontation – even verbal – not because it is unprofitable to any of the parties. Here we are all a perfect example of diplomacy!
Meanwhile, against the publication of a large tranche of macro statistics from China, the latter decided to devalue the yuan, which this morning had been weakened by 0.2% (which is a lot, given the commitment of NSC targeting of the national currency) to 6.92 against the dollar. If further figures on the economy of China will signal even the slightest deterioration of the situation, there is no doubt the market remains bullish, with a willingness to break the rock and go above $1238/oz upon the occurrence of the new circumstances a geopolitical flare-UPS, deepening the crisis in Italy or the deterioration of macroeconomic indicators of the United States – each of these factors has the potential to enhance purchases precious metals by institutional players, and the world’s largest Central banks.
Vladimir Rojankovski,
“International financial center”