Stock markets await the decision from the fed

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Asian stock markets on Wednesday showed a good rise. Less other increased Japan’s Nikkei, closing higher in the range of 0.4% amid renewed yen demand. European markets opened with slight increase in average by 0.1%. The exception was the Italian FTSE MIB, which is located in negative territory because of the tension around the budget plan.
The Russian market opened in different directions, but soon both indices came in the growth zone. RTS increased by a quarter percent, the index Mosberg symbolically raised above the level of the opening of the session. In General, the activity of investors was limited, which is not surprising, given the approach of the decision of the U.S. Federal reserve on monetary policy.
Controller with almost 100% probability to raise interest rates – the third time this year. The key point for investors – suggesting the Bank of to another increase in December. In our view, the likelihood of this scenario is big. Also, markets will be eager to catch any signals on the subject of longer-term prospects for monetary policy in the United States, especially in view of the further escalation of a trade war between the US and China. In the framework of the base scenario expected short-term rise in the dollar as the initial reaction to the increase in the cost of credit, with the risk of a subsequent rollback.
After yesterday’s pause, the ruble resumed its rise against the currency basket, although the momentum looks moderate. Dollar konsolidiruyutsya in the area 65,60 RUB under pressure on Forex. The growth in oil prices supports the position of the Russian currency. Brent resumed climbing, sitting on level 81. Next goal – area 81,80, where yesterday the price of said new 4-year highs. Report Ministry of energy will affect the dynamics of the market only in the case that will reflect a significant decline or increase in crude oil inventories in the United States. The overall picture suggests the continuation of the bullish trend at least in the short term.
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Nathan Lambert
Head of research,
Global FX