The Russian stock market: On the horizon again the subject of sanctions

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On Tuesday, the stock markets of Russia, traded with moderate optimism, reflecting the moods on the global markets, where investors are driven by hopes for progress in trade negotiations and conclusion of an agreement in Congress to avoid another shutdown. The second factor is positive for risk assets in General, but in some degree negative for Russian assets, as the resolution of political issues increases the chances that the officials again will switch to the issue of sanctions.
By the way, today the Finance Committee of the lower house of Congress will begin consideration of the issue of new sanctions against the “rivals” of the United States, with a particular focus on Russia. While domestic investors are trying to ignore the renewal of the sanctions rhetoric and act out the external background, as well as new attempts of growth in oil prices. However, with the development of this subject, the market can take correction, and deep enough, considering what high levels are traded the indices. In the meantime, the index Mosberg and the RTS rising 0.3% and 0.6% respectively.
The ruble also pretends not to notice, strengthening the dollar and the Euro by 0.5%. Brent crude is once again testing the mark of $ 62 per barrel on universal optimism in trade negotiations. But repeatedly trying to break through the barrier 63 and above led to profit-taking, so it is possible that at this time quotes will not be able to build on the success.
Given the instability in the oil market, the return of the topic of sanctions and the factor of the strong dollar, the ruble has virtually no chance to confident strengthening from current levels. In the best case, the pair dollar/ruble will continue to trade in a range of 65.50-66 RUB in the short term, with the prospect of breaking its upper boundary in the future.
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Gennady Nikolaev
Expert
Academy of management Finance and investment