The dollar is growing, the fed is not a surprise
The miracle did not happen. In a press release, the fed appeared not only the original commitment to the “normalization” of monetary policy (interest rate), extremely transparent mention of the obligation of another episode “until the end of 2018” (i.e., the chances of a rate hike at the next meeting in December can be considered almost completely).
The market, finally, it seems, began to realize that the tightening of monetary policy in the US and all accompanying standard effects – such as compression of liquidity, decline in demand for loans and, ultimately, a slowdown in the growth of the US economy is not a fantasy but a reality, already comfortably perched on our doorstep.
As a consequence, I may say, “enlightenment” stock indices around the world fell yesterday. The American S&P 500 and Nasdaq fell . But even more, in anticipation of the total slowdown affected the oil degraded since the announcement of the fed’s decision on rate on the “good” of 3.3%.
Against this background, the decline of the Russian ruble by 2% from November 7, with level 65,90 per U.S. dollar before the current 67,04 per dollar by 2% doesn’t seem so catastrophic, although, of course, it’s not good.
It should also be borne in mind that today the majority of currencies of emerging markets suffered from another round of strengthening of the dollar in the footsteps of yesterday’s press release, fed. As a consequence, we repeat its bid for growth volatility (the volatility index VIX is downright obscenely low 17,30) and a rebound in gold to levels low, $1260-1265 per Troy ounce.
Also the fact that the ruble is in fact still well kept, comes after a reminder on the introduction of additional sanctions against Russian officials – but not in anticipation of the so-called “business Skrypalia”, the news of which was exaggerated in the Russian media on Tuesday, and in the context of “grafted from nowhere” accusations of Russia related to the Kremlin’s position in relation to the Crimea and the Donbass. What position? As it turns out, nothing new – just for the fact that it’s still there and does not coincide with the position of the United States, and nothing more. But this episode suggests that the prediction of sanctions is an even more thankless task than the prediction of oil prices.
In tandem with the Euro, the ruble was trading at around 75,90 dull, almost not giving any signs of life and strengthening against the Euro, which we a week ago called the weakest currency against the dollar among those who are in our field of vision, on a meager 0.06 percent. This morning came the news on inflation from China, which showed a high level of discipline practiced by the people’s Bank: producer price index in October decreased by 0.3 percentage points to 3.3% per annum and the consumer price index – generally the third month remained at the same level of 2.5% in annual terms. The exchange rate of the yuan against the dollar fell slightly to 6.95 – however, this movement was mostly in the context of the above General building “green”.
“International Financial Center”