The Russian stock market will open neutrally

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Expect neutral opening of the Russian market amid a weak bounce up to 0.3% futures world stock indices. Thus, at the beginning of the earnings season of American companies, maintained SP500 sideways movement as investors will make further decisions after the report, up to 80% of the above mentioned index. If the results are weak, investors will partially close positions on the stock because of overvaluation. Thus, the American market will adjust down.
An additional driver for the market will be new elections in the lower and upper houses of Congress. It is possible that against this background, emerging markets will receive the inflow of speculative capital, but investors are likely to choose short fixed income instruments in anticipation of a fed rate increase in December.
Long government bonds will also be in demand because of the greater profitability than the gross rate of dividends on the SP500 1.82%. And while investors are waiting for the current event Tuesday: a publication of the currency report by the US Treasury and data on industrial production report for September. Foreign exchange report will help to form an idea about the situation on China’s manipulation of its currency.
The ruble, after the payment of insurance premiums on Monday, on Tuesday are likely to be weak because of the publication on Wednesday of the FOMC minutes, the fed, which will give an idea about the facts that have played in favor of increasing interest rates in September. This will help to determine the prospects at the rate in November and December, which would also support the dollar.
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Viktor Veselov,
Chief analyst,
JSC “GLOBEXBANK