The dollar will support the auctions of US government bonds

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The Russian market will decline at the opening of trading on the background of the decline in futures on global stock indices by 0.4% and 1.5%. Locomotive of the fall made of high-tech, financial, industrial sector of the U.S. market. At the end of trading yesterday the broad market index SP500 fell by 1.7%. Investors believe that the scandal with the data Facebook will influence negatively on the profit of many high-tech companies. Perhaps this is why some of the capital flowed into the market of US government bonds, where yesterday held the auction on placement of notes for a period of 1 month and 1 year, and 5-year bonds with a rate of distribution of 1.7% and 2.07% and 2.61%, slightly lower than previous auctions.
Therefore, the dollar index increased marginally to 89.6 b.p. or dollar strengthened against the Euro by 0.6% to $1.24. In addition, on Wednesday will take place the auctions at the 2-and 7-year notes, and will also be published data on quarterly US GDP, and Thursday’s data on personal consumption expenditures. Owing to good results in the labour market PMI and to a lesser extent the ISM, we expect to see GDP growth compared to the previous result. This will play in favor of the dollar.
The ruble will support the completion of tax payments and auction on placement of OFZ. However, given the forecast API, which showed an increase in crude oil 5.32 million barrels. over the past week, which affected oil prices decline 1% to $69,6 per barrel., we see no reason for the strengthening of the ruble. Plus the gradual increase in the number of active drilling rigs in the U.S. will be supported by the imminent completion of planned maintenance at the refinery, resulting in the production of the USA will increase, which will negatively affect the prices of oil.
Viktor Veselov,
Chief analyst,