The Russian market continues to wander in no particular direction
The Russian market continues to wander in no particular direction. We can say that the ruble hovered, awaiting further signals. Since the beginning of the day, the pair EURRUB loses 10 cents, trading at 74.90 due to the weakening of the single currency most of its competitors. USDRUB fourth trading session remains at 65.60. In this pair can be traced to some bias toward growth, which is evident by the increasing intraday lows. However, you shouldn’t pay too much attention to such dynamics, as all this is happening against the backdrop of falling trading volumes and a strong movement can easily break the current picture.
The market signal in this case is simple: investors cling to the side, waiting for a new powerful factors, which will be under the power to interrupt a long period of calm.
Wait can stretch to the end of the week, when the Bank of Russia will publish its next decision on interest rates.
Note that the power of the ruble since the beginning of the year may go to the detriment of the course. The CBR in January not only came back to purchase foreign currency in the budgetary rules of the Ministry of Finance, but additionally strengthened his intentions. This event coincided with a stop of the rally of the ruble, although the main reason was not.
Now all market participants ‘ attention will be focused on signals regarding the rate hike. If the markets and then get “soft” rhetoric of the Central Bank, this may be an additional blow to the Russian currency. Recall now the parties wait for another one or two rising through 2019 as a measure to fight inflation and support the ruble.
However, with the beginning of the year the national currency obviously do not need support, and inflation is in no hurry to gain momentum due to very weak domestic demand. In addition, the Bank of Russia, like other Central banks of developing countries, was forced to raise rates in the footsteps of the fed. However, at the end of the year, the fed has softened the rhetoric, and last week completely removed from public comment about the phrase “the need for further increases in rates.” Using the analogy of Alice in Wonderland, the Bank of Russia has eliminated the need to run to stay in place.