The external background on Wednesday morning can be described as moderately positive. Sentiment abroad has improved, and oil prices are trying to recover from the lows of the week. Important geopolitical news is expected in Russia during the visit of US Special Envoy Witkoff to Moscow.
Trading on the US stock exchanges the day before, after attempts to increase at the beginning of the session, ended with a decrease in the three main indexes by 0.1-0.6%, led by the high-tech Nasdaq. The market was cautious near the area of important short-term resistances after data released on Tuesday showed an acceleration in the growth rate of activity in the US services sector in July above forecasts, prompting fears of the Fed maintaining a moderately tough stance in the coming months. The ISM business activity indicator, at the same time, showed a more restrained growth rate than in June and remained slightly above 50 points. In addition, there are fears on the stock exchanges of an aggravation of the trade situation and the introduction of new duties by the United States, in particular in the high-tech and pharmaceutical sectors.
Futures for the S&P 500 index are adding about 0.4% in the morning, returning above the resistance and the psychologically important 6,300 point mark as part of the correction. At the same time, the middle of the week in the United States is expected to be calm on macroeconomic events, and investors are likely to assess the overall economic and geopolitical picture.
Trading in Europe ended yesterday with a 0.1% increase in the Euro Stoxx 50 index, which, however, retreated from the highs of the day amid sales in the United States. The data released on Wednesday showed a 1% mom drop in German manufacturing orders in June, following a 0.8% decline a month earlier (expected +1.2%).
A positive trend prevails at trading in Asia in the morning following the growth of American futures. Japan's Nikkei 225 increased by 0.65%. The Australian ASX 200 gained 0.8%. China's stock exchanges are mostly rising within 0.5%. Hong Kong's Hang Seng fluctuates between plus and minus, remaining above the short-term support of 24,700 points.
Brent crude futures are rising by just over 0.5% in the morning after falling by about 1.5% the day before, when quotes fell to the low of the end of July, to the support of $ 67.50, amid fears of a slowdown in global demand amid trade wars along with a parallel increase in OPEC+ oil production. A bullish risk for the market, however, remains the possible tightening of US energy sanctions against buyers of Russian oil. At the same time, the American Petroleum Institute reported on the eve of the reduction of "black gold" reserves in the country last week by 4.2 million barrels. The report of the US Department of Energy on Wednesday is expected to increase oil reserves by 200 thousand barrels on average.
The indices of the Moscow Stock Exchange and RTS did not show a single trend on the eve of the main session. The ruble indicator rose by 0.45%, while the dollar-denominated RTS fell by less than 0.1%, under pressure from currency fluctuations. The market was trying to regain positions, but still remained below the short-term resistances of 2,790 points and 1,100 points, respectively, which separate it from moving into the area of important resistances of the last weeks of 2,860 points and 1,160 points.
The ruble against the yuan on the Moscow Stock Exchange weakened by 0.2% the day before, to 11.09 rubles. The official exchange rates of the dollar and euro of the Central Bank of the Russian Federation amounted to 80.04 rubles and 92.50 rubles, respectively (against 79.67 rubles and 92.32 rubles on the previous business day), reflecting a restrained weakening of the ruble against both currencies. At the same time, the Central Bank of the Russian Federation on Tuesday announced its intention from August 7 to reduce sales of foreign currency under the budget rule to 9.24 billion rubles per day from 9.76 billion rubles, and the Ministry of Finance to reduce sales of foreign currency / gold to 0.3 billion rubles from 0.82 billion rubles per day.
At the beginning of the main trading session, the Russian stock market is ready to develop a restrained growth in anticipation of news from the meeting of the US Special Envoy Whitkoff with the leadership of the Russian Federation scheduled today as part of another attempt to resolve the Ukrainian crisis. With the successful course of the meeting and the ability of the parties to reach new agreements, we can expect, among other things, a reduction in the risks of imposing sanctions against the main buyers of Russian oil – China and India, and corresponding support for energy sector stocks. The situation, however, remains tense.
Elena Kozhukhova, analyst at IC VELES Capital.https://veles-capital.ru/analytics/article/rossiyskiy_rynok_pered_geopoliticheskimi_peregovorami_smo...
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