The dollar and the fed will set the mood in the markets

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On Wednesday, the mood of global investors has somewhat stabilized and even improved slightly. In Asia, the auction proceeded differently, European and us futures are trading in the red after recent sales. The China’s Ministry of Commerce reported a telephone conversation with Washington, during which they discussed trade relations between the two countries. Besides, reported on the new supply of us soybeans to China.
Investors jumped at the progress in relations between the two countries and began to buy back cheap shares, but overall activity is limited, due to the caution of the players ahead of the fed meeting, which will be the main event for the week.
The Russian stock market remains in the power of bearish sentiment. At the opening session, the index Mosberg and RTS losing 0.6% and 1.0%, respectively. This is not surprising, if you look at the dynamics of oil quotes. Yesterday Brent fell by 5%, violating the integrity of level 56 for the first time in 14 months. Morning quotes trying to recover, but look unconvincing, and the rebound is more technical in nature as positive drivers in the market is still there. The ruble in response touched a minimum of 6 December 67,14 RUB, but the pair immediately slipped under the mark of 67 rubles. – the negative side of oil offset by the weakness of the dollar on the Forex.
The us currency is in danger of falling under a more aggressive selling pressure if the fed expects the majority of investors, will demonstrate soft and cautious rhetoric about the prospects of monetary policy for the year 2019. But if the worst fears of the dollar bulls are correct, the USD may even raise the demand, because in this case the markets will hope for a further – albeit more modest – the increase in borrowing costs next year.
Nathan Lambert
Head of research,
Global FX