The ruble and the dollar during the week will compete for the championship
Expected weak growth of the Russian market amid low volume trading on Asian markets because of holidays in Australia, Hong Kong and weekend weekly in China, but with continued recovery in the price of oil Brent by 0.8 percent to $83,2 per barrel, where it was last in November 2014. The participants of the oil market is preparing for a joint forum, which was held on 3 October, which will bring together all the key players: Russia, Saudi Arabia, Iran etc.
This meeting is interesting because from November starts to act US sanctions on Iranian oil exports, which implies a reduction of supply on the world market and moves the prices of “black gold” up, but also that Iran already offers to a number of countries barter deal – oil in exchange for goods. Theoretically, the us sanctions could be extended to third parties who are involved in such transactions, therefore, for investors it is important to monitor the agreement on the basis of this forum.
In General, the week will be key for the us dollar as there will be published statistics on indexes of business activity, factory orders, labor, employment, wages. The consensus forecast is neutral with respect to the values for August. We believe that on Monday the index of business activity in the manufacturing sector from the ISM may show an increase, based on expectations of strong results on industrial orders.
This plays in favor of the dollar. However, at the end of the week will be published the interest rates of the Central banks of Mexico and India, they are expected to increase, which will play on strengthening of national currencies against the dollar. Against this background, other em currencies will be supported, including the ruble. But in the first half of the week, the ruble will draw attention to the rising oil prices.