Stock markets: the current calm is deceptive
Chinese markets added more than 1% on Tuesday in hopes of incentives from the government. Previously, companies in China by the end of April, noted a sharp decline in profits, sparking speculation that this will be followed by further measures to reduce the tax burden on the company. China stopped buying oil from Iran. This news received by the markets as concessions to China in trade disputes. Tramp is currently on an official visit to Japan. He gave cautious hints at a possible announcement of the transaction in August, however, the representatives of Japan hastened to soften the expectations. All this creates a positive background, but the markets are not in a hurry to buy the stock in anticipation of the direct signs of progress.
The lull of the ruble continues. USDRUB continues to stagnate near 64.50. Except for a brief failure of the ruble last Thursday, the Russian currency is like experiencing a summer lull. Apparently, the traders with the ruble kept aloof until it was clear further trend. On the one hand, growing the chances of easing by the CBR in June, and oil is experiencing difficulties with growth above $75. On the other hand, the sharp slowdown in inflation increases the real (inflation-adjusted) yields on Russian debt securities, increasing their appeal. But still, at the moment, more reason to keep caution about the prospects for global markets and the ruble in particular. The current lull and the choice of the trend, it seems, are more likely to end with a period of weakening of ruble.
The stock market
Stock indexes add to the hope of the incentives the governments of China and some signs of reducing the intensity of the trade conflicts of the USA with other countries. However, the dynamics of the debt markets continues to call for caution. The yield on 10-year bonds yesterday fell to 2.28%, lows from October 2017, and the futures rate the fed noted an 83% chance of lower rates by January 2020. The decrease of yield in the debt markets supports the purchase of shares, however, is an important sign of the growing anxiety of investors.
The pair once again turned to a decrease, not being able to hold the levels above 1.1200, trading at the time of writing at 1.1180. The pair remains in downtrend, noting the sequence of lower highs and lower lows. But at the same time, EURUSD was supported on dips to 1.1100 in April and earlier in may, which increases the attention to this level.
The gold’s bounce this week ran into resistance near $1285. The sellers increased the pressure on gold after hitting 50% of the decline from $1303 to $1269 for the period from 14 to 21 may. Technically, you can also say that gold is emne allowed above the 50-day average due to the growth of the dollar and news about weakness in the Chinese economy. Despite the fact that gold is often called the silent Harbor, the surge of quotations it often occurs on a sharp flight from risk, and the current sluggish sale is more damaging because of protective thrust in the dollar and bonds.
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