The ruble is now in suspended animation

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July 31 will be held the next meeting of the Committee on open market operations (FOMC). Analysts and economists are waiting for the results of this meeting, lowering the Federal funds rate by 0.25 p. p.. However, there are growing concerns that Jay Powell at the hearings in Congress, and Jay Powell at a press conference the FOMC is two different people. In the end, all realize that if the fed does not cut rates, the markets expect a hard correction, for any victorious breakthroughs from the current semi-annual reporting of the American corporations almost no one is waiting.
This, in particular, can be read in yesterday’s press release, Citigroup, timed to the publication of semiannual financial reports. More specifically, financial Director mark Mason said the situation with the fed rate cut “undetermined.” He noted that the Bank allows for the reduction of the rate by a quarter point in the second half, but “if there was more than one rate cut, this would [at all] big [psychological] pressure.”
In such a scenario, the President of the United States Donald trump is very likely to move from words to deeds, and with the help of his new appointees to the Board of governors of the Federal reserve will begin to torpedo the comprehensive monetary easing (2020 presidential race has already begun!), which, of course, would include depreciation of the dollar against foreign currencies.
Supporters of such thinking becomes the expert community more and more.
Analysts last week openly talking about the possibility of intervention of the White house administration to weaken the dollar. Such a perspective is discussed against the background of increasing criticism as the fed and exchange rate policy of Central banks of countries that are major trading partners of the USA, from trump – and-communicating with journalists, and the infamous tweets.
Meanwhile, looking at the gradually culminating season semi-annual corporate reporting in the USA, admittedly, primarily from technology companies who have been at the forefront of indexes for the better part of the past decade, based on the most severe risks of a slowdown related to a potential recession. The consensus forecast expects that the trade turnover of the IT sector will be reduced by approximately 12%, mainly due to an excess unsold inventory, which tend to accumulate with increasing negative effects from trade wars.
Large technology companies that have largely been implemented in other related sectors suffering from recessionary expectations and the General slowdown associated with the “viscosity” of trade wars. In addition, they inevitably stored in cash in case of a sharp surge in government surveillance – in terms of how “anti-spyware” events and the protection of personal data.
The ruble is now in suspended animation. All major events will happen in American session, and while only it is possible to ascertain the full news calm and sluggish, oscillating in the range of $66,10-66,70 Brent crude, which also makes the domestic currency no definite signals.
In tandem with the Euro, the ruble was trading at 70,52 also practically remaining at the levels of yesterday’s trade at the same time. The same can be said about lurking waiting for the aforementioned fed meeting gold traded in a narrow range of $1403-1418 per Troy ounce. Long ago the markets did in their actions (or in this case inaction) such large bets on the outcome of the planned meeting of the monetary managers of the American Central Bank!
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Vladimir Rojankovski,
LIFA,
The expert “International financial centre”