The Russian stock market on Thursday will be reduced

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Expected minor decline in the Russian market at the opening of trading on the background of multidirectional dynamics of futures on the world stock index and with a decrease of 0.3% nearest futures MSCI emerging markets. Such reaction of investors caused by the results of FOMC meeting, U.S. Federal reserve, the report of which shows that the position to increase the rates 3 times in 2018, i.e. until the end of the year 2 projected rate increase. Based on the futures bet, the chances increase to 2% is estimated at 60% at the meeting in June, and in may, unchanged. But a more rapid increase in rates is expected in 2019 to 3 times and 2020 to 2.9% and 3.4%, respectively.
Also improved the forecast for US GDP from 2.5% to 2.7%, while consumer inflation remained unchanged at the level of 1.9%. Against this background, the American market finished trading lower, as the yield of UST-10 has returned to the level of 2.87%. Now investors will focus on the assessment of the impact of the expected introduction of protective duties of the United States against Chinese products, so emerging markets can obtain liquidity.
The rouble will receive support from rising oil prices to nearly $70 per barrel, which is caused by the weakening of the dollar against global currencies, like the Euro by 0.78% to $1,236 per Euro. Plus Russian exporters will also form the demand for rubles due to tax payments at the beginning of next week. In addition, we believe that the narrowing of the spread between the rate the U.S. Federal reserve and the key rate of the Central Bank of the Russian Federation will not lead to a reduction in the share of OFZ bonds in the portfolios of foreign investors, because real interest rate on ruble-denominated assets remains above 4.2% among developing countries.
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Viktor Veselov,
Chief analyst,
Bank “GLOBEKS”