The ruble will benefit from the results of the G20

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The G20 summit has led to some discharge in the trade confrontation between the US and China. In General, the results were within expectations, but the unexpected was the decision by trump to allow American companies to sell their products to Chinese telecommunications giant Huawei. The White House spokesman, however, later issued a clarification that this applies only to widely available on the components market.
While the new duties will not be imposed, but imposed duties are not cancelled. It is not excluded that the renewed negotiations to end in failure, but so far the markets can hope for the best.
The dollar, as is typical for him in recent times, reacted positively to rising risk appetite and strengthened as EUR and JPY. This trend may continue in the early weeks, but then expectations of monetary easing from the fed likely to prevail, and the trend of dollar weakness will resume. Key support for EUR/USD stands 200-day moving average, which now runs in the area of 1.130.
Approximately there is also the 0.618 retracement level of the rise from the may bottom to the recent local maximum. For USD/JPY significant resistance is in the area of 110, but has not yet been consolidating above the 108.5 again, talking about the growth potential of the pair prematurely. Also do not rush to bet on further recovery of AUD/USD. Among commodity currencies, the CAD, in the light of the extension of the transaction OPEC+ still looks more preferable.

The ruble

The ruble will benefit from the results of the G20 will give a new impetus to strengthen, especially in the pair EUR/RUB, where he can attempt to go below 71. It will be hard to do, since then the ruble will be included in the viscous range, traded in the second half of 2017. We still do not expect significant strengthening of the ruble from the current levels, as the weakness of the Russian economy, together with policy interventions of the Bank of Russia, in our view, will prevent the development of this trend. The only thing we care is a significant bet against the ruble made, according to CFTC, hedge funds. Before the trend of strengthening of the ruble will end, it is possible to spike that will make the most risky players in the derivatives market to register losses.

The stock market

Stock markets will show this week growth, reflecting the discharge in the trade war. We expect new records from S&P-500. The RTS index, which last week consolidated at the highs will probably go up further in the current growing trend. Now the market is at the levels of the summer of 2014, when against Russia were introduced sectoral sanctions, and will try to go higher. We don’t expect it to be easy, especially since there were reports of sales of significant volumes of Russian securities by insiders. We suggest rather to reduce positions in Russian equities. Between the American and the Russian stock at current levels we prefer American.
Dmitry Golubovsky
FG “Kalita-Finance”