Comments of the US Federal Reserve on the results of the meeting may determine the results of the week on world markets

Bogdan Zvarich, <url> 18 September 2023 11:43

In the coming week, the main factor for global markets will be the meeting of the US Federal Reserve and the decision on the rate. It is expected that the US regulator will keep the rate at the current level. This step has already been incorporated into asset quotes, while the main attention of investors will be paid to the comments accompanying this decision. The tough position of the regulator and its willingness to continue fighting inflation, as well as assessments of the current economic situation and the trajectory of inflation, may put pressure on the quotes of risky assets. Also during the week, the attention of the markets will be focused on preliminary data on business activity indices in industry and services in European countries and the United States, which will show business sentiment against the backdrop of high rates in developed economies. Plus, we note the publication of inflation data in the UK and the meeting of the Bank of England, which may raise the rate by 25 bps.

If we talk about the mood on the world markets on Monday morning, they can be described as moderately negative. In Asia, in the absence of trading in Japan, the leading sites show a decline of 0.9%. Futures on major US indices, after a significant decline on Friday, are trying to move to a corrective recovery, adding slightly less than 0.2%. The situation on the energy market is once again a positive moment, where the nearest futures for Brent crude oil is being pulled up by 0.6%, trading around $94.5 per barrel.

By the end of Friday, the Moscow Stock Exchange index added 0.4%, rising to 3,153 points. Today, at the start of trading, we expect the predominance of purchases in Russian securities to continue. The rate hike by the Central Bank of the Russian Federation by only 100 bps, as well as the continued improvement in oil prices, will push Russian stocks up. As a result, the Moscow Stock Exchange index may try to move to growth after the consolidation of the previous week and take a step towards the local highs set in early September.

On the currency section of the Moscow Stock Exchange this morning, the ruble is weakening against major world currencies. So, by 8.50 Moscow time, the dollar and yuan are adding 0.2% and 0.4%, trading around 97 and 13.3 rubles, the euro is growing by 0.6%, rising to 103.5 rubles. It should be noted that the national currency continues to ignore the improvement in the situation on the energy market, where Brent crude oil has risen to the upper limit of the corridor of $90 – $95 per barrel. At the same time, in the coming week, in addition to the increased supply of foreign currency from the Central Bank, the ruble will support the start of preparation of exporters for the peak of tax payments. As a result, on the horizon of the next sessions, the ruble will try to move to strengthening, which may lead to the return of the dollar/ ruble pair to the range of 90 – 95 rubles.

Bogdan Zvarich, Chief Analyst of the financial marketplace <url>

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