The Russian stock market will start a trading day in a neutral
Expect neutral opening of the Russian market against the background of multidirectional movement, -0.3% to +1.7%, futures on global stock indices. The dollar index returned to the values Tuesday at 96.2 points, but the yield on 10-year U.S. Treasury rose 6 b.p. to 3.24% on Wednesday, while the SP500 rose by 2.12% to 2813 points. In other words, there is a growing appetite for risk against the expected result of the elections in the U.S. Congress. The Democrats took the lower house, the Republicans hold the Senate, that will force both sides to compromise on any legislative issues.
At the same time, investors believe that this balance of power helps to restrain the initiative of the President according to new laws concerning the finances of the country that the FOMC will encourage the fed to slow down the cycle of raising interest rates. In turn, the FOMC will continue to raise rates in response to the growth of the economy. However, based on the futures rate, the market does not expect its increase at the FOMC meeting on Thursday 8 November. Note, its share of the risk appetite received Russian market – Delta movement of capital in the largest ETF with a focus on Russia increased to $46.3 million over the last 3 trading sessions.
Thus, there is a risk of the introduction of the second package of sanctions in the near future, despite their criticism of the President of the United States. This will keep the rouble from significant strengthening, but given that oil prices can go into growth in anticipation of the meeting of the monitoring Committee of the OPEC deal “plus” on Sunday, where will be discussed the continued decline in production volume, may be followed by a slight strengthening of the ruble.