US exchanges pared some of yesterday’s losses this morning

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The Russian stock market opened on neutral territory, the index is trading Mosberg in the area of 2380 points. The leaders of growth shares of “Severstal” in the background of the positive reports of the company for the third quarter and plans to increase dividends in leaders of falling shares of Yandex on the background of rumors about the plans to purchase 30% of the Internet company “the savings Bank”.
American markets after our closing has decreased, but this morning played part of the decline. Asian markets are in positive territory, the Shanghai Composite adds 3%. The slowdown in China’s economic growth to 6.5% yoy in the third quarter was offset by the statement of the people’s Bank of China that the situation is under control, and Vice-Premier Liu He, China and the United States have a connection with. Brent in the morning attempting to rebound, now trading at $79,5.
The ruble continues to weaken against the dollar and the Euro. In the morning for one dollar offer 65,9 RUB, EUR – RUB 75,4 playing Against the ruble strengthening of the dollar in world currency markets and the General weakness of the currencies of developing countries. The actual trading range for the pair dollar/ruble today is 65,5-66,5 RUB, EUR/RUB – 74,9-75,9 RUB.
The CBR has declared its readiness to enter the market for asset purchases, if necessary. QE in Russian, that is, quantitative easing, possibly to maintain stability. The head of the Bank of Russia Elvira Nabiullina did not rule out the release of the CBR on the currency market, but again only for the maintenance of financial stability.
Both news, of course, very positive and show high professionalism of the management of the Bank of Russia, which considers different scenarios. Russian QE, of course, a little support to the real sector of the economy. Any soft monetary policies like businesses. However, the main positive would be primarily for financial markets. First and foremost, of course, for the bond market and secondary – market shares.
As for the currency market, the CBR targets inflation, not exchange rates. Exchange market intervention is a possible but unlikely scenario. Most likely it will be the decision of the political leadership of Russia. The resources for this. International reserves of the Central Bank of the Russian Federation is now about $460 billion Plus resources exporters, for example, the cash cushion “Surgutneftegaz” in excess of $44 billion, It is comparable to some of the international reserves of sovereign States.
We maintain the target for the summer of 2019 at 62 rubles per dollar.
The external background to today’s trading has developed in mixed trading on index Mosberg on Friday will be in the range 2370-2390 points.
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Alexander Razuvayev,
The Director of analytical Department,
Alpari