Ruble assets were in the red due to external background and oil

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Index Masuri at the end of the day lost 1.2% to 2336 points, and RTS due to the weakening of the ruble fell 1.3 percent to 1,186 points.
Trading on major world markets by the evening formed a depressingly negative external background: the European STOXX 600 lost impressive of 1.21% and the American S&P 500 fell 0.61%.
Negative international markets added sudden and severe exacerbation of trade disputes between the US and China. On Tuesday evening the presidential administration of the USA published a list of several thousand items of Chinese goods for a total of $200 billion a year, subject to increase in tariffs. Hard expected at least a response from China.
In Russia negative added geopolitics. The strengthening of the ruble and the growth of quotations of stock indices was largely due to positive expectations about the meeting, trump and Putin on July 16. However, these expectations were overshadowed by trump’s comments at the NATO summit in Brussels: he has strongly criticized Germany for its support of the project of construction of the pipeline “Nord stream-2”, calling it “a hostage of Russia.”
Machinery orders of Japan in may increased by 16.5% y/y, expected at 8.6%. The producer price index in the U.S. in June and +3.4% y/y, expected +3.2 percent.
On the Moscow stock exchange outperformed the market stock quotes “Tatneft” (AP: +1.4 percent), PIK (+1.3%) and NOVATEK (+1%). The outsiders were Norilsk Nickel (-4%), Mechel (AO and 2.8%) and “KAMAZ” (-2,7%).
“ALROSA” (-0,5%) in June increased sales in dollars by 35% from may and 7% yoy. In roubles for the six months, revenue growth was 10%. Tomorrow the paper will be opened after the dividend cut – when the pay of 5.24 rubles. per share, the yield would be 4.9% per annum.
Oil the main grades traded in a deep red, losing within 3.3%: a barrel of Brent cost $76,3, and the barrel of WTI is $72,3. Positive weekly statistics on oil market in the US hasn’t helped the market, stocks fell 12.6 million (expected a decline of 4.5 million; yesterday API was waiting -6,8 million), the production remained unchanged.
The U.S. Department of energy in July 2018 revised the Outlook on the global balance of supply and demand of oil in 2018. In comparison with the review for June is now expected to reduce the shortage of oil from 0.36 million bbl/day to a modest of 0.18 million bbl/day. In 2019, the market is stable and will be in surplus in each of the 4 quarters. By the end of 2018, global oil production will increase year-on-year to 2.54 million barrels./the day before 101,07.
It will happen mainly due to the increase in US production, more than offsetting the decline in Venezuela, Nigeria, Libya, etc. at issue is the situation in the sanctioned Iran. Global consumption will increase by 2.13 million barrels./the day before 101,47 – due to the mostly uniform increase in consumption in the United States, India and China. Bad news for oil prices. We expect by year-end, $69 for Brent.
On currency markets the us dollar to the evening was added in the range of 0.6% to 62.1 rubles, and the Euro 0.3 percent to 72.8 RUB Oil, geopolitics and the external background did not leave the ruble is likely, despite the good demand for OFZ in the regular auction the Ministry of Finance on Wednesday.
The evening is expected weakening of the ruble against the U.S. dollar, the index of Mosuri from the levels of the evening clearing will show negative dynamics.
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Timur Nigmatullin,
Analyst
“Opening Broker”