Stock market: Investors fear before the G7 summit

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With the decline of 0.3-1.6% of futures on global indices trading on the Russian market will open decrease. Investors fear before the G7 summit, which starts on Friday. Therefore, the yield curve of US government bonds and the first EU countries is insignificant moved down. The dollar early in the week weakened the Euro by 1.2% from 1,165 to 1.18 in anticipation of hints from the ECB on the timing of the tapering of QE at the meeting next week. Investors also do not know what will be the position of the President of the United States during the G7 summit about the prospect of protective duties on the import of goods in the United States.
If not reached mutual agreement, then the EU may well declare a unilateral, partial withdrawal from the Treaty on sanctions concerning Iran, Russia and other countries to compensate for economic losses. In addition, Italy and Austria in favor of lifting anti-Russian sanctions. However, we prefer the dollar due to the advance of the FOMC meeting, the fed’s monetary policy. The market is waiting for increasing the upper level of the interest rate to 2%, this probability is 84%. Therefore, the situation in emerging markets remains tense, the outflow of capital will continue, including from Russia. This plays against the ruble.
Viktor Veselov,
Chief analyst,