Stock markets fall, investors shun risky assets
Despite the optimistic comments by the US and China, the flight from risk in global markets intensifies. This is partly due to the appointment of Robert Leitheiser, which is frankly a tough stance against Beijing, the chief negotiator with the PRC. Partially affected by the resumption of sales for steel sector under the influence of the dollar’s recovery. Also there is a General nervousness ahead of a vote on the draft Brekzita in the British Parliament, of the summit of OPEC+ in Vienna and on the background of the lengthy dialogue between Brussels and Rome.
So, after considerable subsidence of the indexes wall street, Asian stocks declined on average by 0.5-0.6%. European futures dipped on average by 1%, reflecting the reluctance of investors to take risks. In response to adverse external background the Russian indexes also opened in the red. The index of RTS Mosberg and lose of 0.97% and 1.21%, respectively. The pair dollar/ruble started session with a gap up, in the area of 66,80 RUB on a broad USD recovery and a negative bias to oil prices. However, the potential decline of our currency at this stage seems limited. Prospects will worsen if Brent will go under level 60 on further profit-taking ahead of the summit of OPEC+.
Forex Euro and pound once again attracted sales growth. The return of demand for the dollar dictates the direction of the European currencies that also focus on internal factors – the budget of Italy and Breaksit. Rome small strides towards the implementation of the EU requirements for budget, but yet concessions not enough to win approval of the project by the European authorities to avoid sanctions. This limits the growth potential of the Euro even in terms of sales dollars. Until resolution of this issue the single currency will remain vulnerable.
Head of research,