Reform of the government of the Russian Federation will strengthen the weakness and malaise of the ruble
In the early weeks you may experience increased volatility in the oil market, as on Saturday the participants in the transaction OPEC+ will decide on its new parameters. With high probability the production will be increased by 1 million barrels a day, with some exceptions for individual countries. This decision could cause a further decline in oil prices, Brent crude could fall below $70 per barrel.
In the currency market the interest for the Euro/dollar, against the publication of data on the business climate in Germany and new home sales in the U.S., the struggle between the dollar and the Euro will continue. States are looking for better statistics, and what data will represent Germany is not entirely clear. With high probability the pair will storm the level of 1,155.
The dollar will continue to gain strength. States will present the consumer confidence index and composite home price index S&P/CS Composite-20. Both indicators are positive expectations. In addition, the evening will be the FOMC members Robert Kaplan and Raphael Bostic, who is likely to be the intention of the fed to raise rates rapidly, which will cause a positive reaction of the speculators and will strengthen the dollar. If the EURUSD will manage to overcome the level of 1,155, in the future to reduce offer a lot of potential.
On Wednesday you can listen to the speech of the Bank of England, but the pound is unlikely to be affected. While the plans of the regulator is not on the rate increase and a radical change in monetary policy. Next week the pair pound/dollar will continue to decline and will return to the level of 1,220.
The States plan to surprise market statistics. Investors expect growth in orders for durable goods in may, on the contrary, the drop in April growth of orders for durable goods is approximately about 5%.
Incidentally, the positive statistics from USA will provoke not only the strengthening of the dollar on the week, but will support the us stock indices. Unforgettable, that on this day comes the important statistics on commercial oil stocks in the United States, the decline in stocks will allow oil prices to recover after the decision of OPEC, the middle of the week, the quotes of Brent will return to around $73 per barrel.
On Thursday the focus of a summit of EU leaders. This event may overshadow any statistics, as at the meeting, the leaders of European countries will discuss all the pressing problems of Europe, in particular the immigration crisis, the trade relations with USA and Russia, and debt problems of South European countries, the Syrian conflict and many more. The statements of the leaders will affect not only the Euro but also on the dynamics of the European indexes, and may also cause fluctuations in the commodity and debt markets.
In addition to the summit you should pay attention to data on growth rate of US GDP in the first quarter, the rate should remain at 2.2% QoQ.
Friday’s summit of EU leaders will continue. In conjunction with the European statistics, the volatility of the Euro/dollar may rise. Eurostat will present data on consumer inflation in the European Union for June, which should achieve the target of 2%. If expectations are confirmed, then at the end of the week the EUR will go into growth. Achieve the ECB’s goal will mean that in the long term the regulator will continue to tighten monetary policy.
Next week ruble pair will not change the trading corridor, the Russian currency remains weak given the external pressure and government reforms. The trading range for the pair dollar/ruble will be 61-63 RUB, EUR/RUB – 72-73,5 RUB.
The Deputy Director of analytical Department,