– the dollar strengthened markedly at the auction on Monday and Thursday. Against the ruble played a number of factors. Most notable was the absence of Bank of Russia, which did not intervene to sell foreign currency for rubles. Furthermore, world markets were down most of the time, increasing the thrust of Russian assets in foreign government bonds, further highlighting the need for injections of currency markets from the Central Bank. It is quite possible that markets have weakened due to fixation of profit by results of a very successful month. This is true of the ruble, which gained about 10% in April before it went on sale at the end of last week and beginning of a new one.
Finally, the sellers were stronger due to fears of a new confrontation between the US and China. The Americans promised that China will pay for the withholding of information about the new coronavirus that gave them the advantage in the early stages of distribution. This can be the third precedent after the chemical weapons of Saddam Hussein and the atomic bomb of Iran, when the us hastily impose economical sanctions on the basis of very controversial evidence. Confrontation with China is, rather, the fear of markets, rather than the inevitably impending threat, therefore, is unlikely to build on it in their expectations.
At the time of writing we see several upbeat signals to markets. World markets started the day friendly and impressive (more than 3% in most cases) to fall. However, American trading played a decline in the start of trading. A careful and methodical buying on dips is a good sign of demand.
Oil feels even more confident. Brent crude rose to $25,6, returning to levels from two weeks ago (as shocking hours of negative prices for WTI).
the foreign Exchange market is a barometer of the nervousness of investors – also calms down. Intraday fluctuations in the major pairs have returned to the levels at the beginning of the year. Usually, this is followed by a reversal of the prevailing trends prior to that. In our case (if the situation will develop according to the optimistic scenario) probably far reassure markets this week and throughout may, with growth in certain sectors. For example, if China and the United States without cost escalation, the oil and the oil companies have plenty of space for a rebound.
However, for the ruble achievement of the month will be area 71-72,5 by the end of may and the probability to reach a 73.5 by the end of this week. Against the Euro the ruble this week may be close to 80 and stabilize at this level at the end of may.
