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How will the markets open on Monday?
The Russian stock market continued its downward trend throughout the past week. The MICEX index fell by 1.8%, while the RTS index as a whole fell by almost 3%. Analysts are waiting for political events in the Middle East next week, after which the dynamics of oil futures will become clear.
On Saturday, the US Treasury Department's permit for transactions with the Moscow Exchange expired. It appears that many non-residents have closed their positions. Alexander Golovtsov, senior analyst at Era Investment Management Company, says:
— There are no major events or fateful statements expected next week, so we can expect some stability. Perhaps those who wanted to close their positions due to sanctions have already closed them at the NSD and the NCC. On Friday, we saw a slight increase in the supply of yuan. Probably because the Moscow Exchange license expired. Therefore, it is difficult to expect further movement in the currency strength due to this. Of the corporate events on Wednesday, there will only be X5 sales figures, as well as foreign macro statistics for the US and China, but I am not sure that this will have a big impact on our market. Perhaps the recent relatively weak statistics from China will still put some pressure on the commodity markets. There is a risk of pressure on raw materials, which may have a negative impact on our stock markets. Well, we are in the last week when the Bank of Russia can comment on monetary policy before its meeting on October 25, which will likely lead to another tough statement from the Bank of Russia. market. — And is the collapse of Moscow Exchange expected next week, when its license expires on October 12, or will it not have global consequences? “I think many have already reacted to the sanctions against Moscow Exchange when they were first announced in June. At that time, there was the first deadline, the first date of expiration of the license, and this first date position was extended until its expiration. closed. In my opinion, the possibility of a squeeze is no longer serious. On the contrary, before that date, the yuan was selling a little on Friday. The selling did not double, it was quite decent, but on Friday the ruble had already strengthened a little, that’s the overall effect. It seems that now we can hardly expect serious results.
The ruble also fell for most of the week, losing 2 kopecks against the Chinese yuan. Only the last two trading sessions had a positive impact on the Russian currency.
The oil market saw significant volatility, with Brent fluctuating between $74 and $82 per barrel. Markets continued to react to events in the Middle East. Financial market expert Andrey Barkhota says:
The ECB meeting will be a major event on global financial markets next week. Market participants expect European regulators to cut interest rates by 25 basis points.