The external background on Monday morning can be described as moderately negative. Sentiment abroad has worsened somewhat since the announcement of Trump's new tariffs, while oil prices remain at their latest highs since June. Sanctions rhetoric against Russia, however, is intensifying, and the EU is proposing to set a flexible price ceiling against Russian "black gold."
Trading on the US stock exchanges on Friday ended with a 0.2-0.6% drop in the three main indexes, led by the Dow Jones Industrial Average. The indicators retreated from the lows of the day, but still remained cautious against the backdrop of Trump's tough trade position, the risks of new duties and the height of inflation both in the United States and around the world.
Futures on the S&P 500 index are losing about 0.6% in the morning, reacting to reports of Trump's intention to impose 30 percent duties against important US trading partners starting on August 1.: The EU and Mexico. In the coming week, the quarterly reporting season will also begin in the United States and data on the country's consumer and manufacturing inflation for June will be released.
Trading in Europe ended with a drop in the index on Friday. Euro Stoxx 50 increased by 1%, which was adjusted from the historical peak of 5,568 points against the background of deteriorating sentiment in the United States. At the beginning of the new week, the market will play back the news regarding US duties and wait for the announcement of EU retaliatory measures.
There has been no consistent trend in trading in Asia since this morning. Japan's Nikkei 225 dropped 0.25%. The Australian ASX 200 fell 0.1%. China's stock exchanges are growing within 0.6% after the release of data on the increase in exports (+5.8% yoy) and imports (+1.1% yoy) of the country in June, as well as the expansion of the trade surplus above forecasts. On Tuesday, China will also publish data on the dynamics of retail sales, industrial production and investment in fixed assets in June and the change in GDP for the second quarter. Hong Kong The Hang Seng rose 0.9%, resuming its movement to the June high of 24,533 points.
Brent crude futures are rising within 0.5% in the morning after jumping up by about 2.5% on Friday. Quotes have returned above $70 and have been at regular highs since the end of June amid expectations of increased demand for oil in the second half of this year, as well as its more limited supply. In particular, at the beginning of the week, the OPEC Secretary General announced forecasts of strong growth in oil demand by the end of this year: the organization will present its monthly market report on Tuesday. The risks of expanding energy sanctions against Russia are also a bullish factor for prices.
The Moscow Exchange and RTS indices accelerated their decline on Friday following the results of the main session against the background of increased geopolitical tensions and decreased by 3.3%, updating the lows since April and May of this year. The ruble indicator is getting closer to the lower limit of the medium-term range, located at 2,600 points: overcoming it may return the market to its lows since December last year. The nearest support for RTS is located at 1050 points.
The ruble against the yuan weakened by 1.2% to 10.95 rubles on the Moscow Stock Exchange on Friday, retreating from the annual maximum of 10.78 rubles. The official exchange rates of the dollar and euro of the Central Bank of the Russian Federation amounted to 77.88 rubles and 91.12 rubles, respectively (against 77.90 rubles and 91.49 rubles on the previous business day), reflecting the restrained strengthening of the ruble against both currencies.
At the beginning of the main trading session, the Russian stock market is set to develop a downward movement and, in particular, risks updating the minimum of the year on the Moscow Exchange index (2,598 points) against the background of the danger of worsening the geopolitical conflict and the expansion of EU and US sanctions against Russia. In particular, the EU continues to try to approve the 18th package of anti-Russian sanctions, which may include a floating ceiling on oil prices and its current reduction to $47. At the same time, Donald Trump is preparing to make an important statement on Russia on Monday and previously threatened to impose 500 percent duties on countries that purchase Russian oil and gas (in particular, China and India may fall under restrictions). The media also reported on the readiness of the United States to expand arms supplies to Ukraine. The deterioration of the geopolitical background is observed in the context of the dividend cutoff season (Surgutneftegaz, Transneft, Sberbank and other issuers will close the registers this week). Meanwhile, an optimistic signal on Friday came from the slowdown in Russian consumer inflation in June from 9.9% to 9.4% yoy, which confirms the existence of a basis for further reduction of the key rate of the Central Bank of the Russian Federation.
Elena Kozhukhova, analyst at IC VELES Capital. https://veles-capital.ru/analytics/
The "Comments" section of the AK&M news agency publishes materials submitted by Russian and foreign investment companies and banks. Their opinions may not coincide with the opinion of the editorial staff of the AK&M agency. The opinions presented in the comments are expressed taking into account the situation at the time of publication of the material. The comments are for informational purposes only; they do not constitute an offer or advice on the purchase or sale of securities. For questions about the placement of information in this section, please contact the agency's editorial office by phone (499) 132-61-30 ext. 0102.
