July 21, 2024

Redemption of bonds by the Federal Reserve eliminates the negative from the virus

General view.In the past week, global stock exchanges were under negative pressure.news flow from China, where, according to the latestdata, recorded 9692 cases of pneumonia caused by coronavirus. Nevertheless, the cautious optimism was triggered by statements by the World Health Organization, which praised Beijing's efforts to curb the spread of coronavirus and did not recommend restricting trade with the Middle Kingdom.

The players took this as a signal thatsoon the situation with new diseases will peak and then decline. However, it is too early for investors to calm down, since the headlines of the world's leading media will for some time cause high volatility in global financial markets.

In the medium term, a positive factorfor investors is the continuation of the Federal Reserve's purchase of treasury bonds program, which will last at least until the second quarter of this year. At this stage, the repurchase volume is $ 60 billion per month. In addition, at least until the end of April, the Fed will continue to conduct regular repos. Thus, as long as global regulators, led by the Fed, continue to supply liquidity to the markets, any corrections, including the deepest ones, will be perceived by players as a good opportunity for new purchases of risky assets.

Stock market.Minor sentiment in global financial markets,driven by expectations of the negative impact of the coronavirus on global GDP growth rates, became the reason for the sale of emerging market assets. Thus, according to Emerging Portfolio Fund Research, in the week ending January 29, funds investing in Russian assets and bonds lost about $20 million against an influx of $420 million the week before. On Friday, the Moscow Exchange index fell by 1.03%, closing at 3076.65 points, the RTS index fell by 1.78%, ending trading at 1517.07 points. The growth leaders were the shares of ChZPSN (+8.85%) and M.video (+2.12%); the outsiders were the shares of SAFMAR (-5.19%) and Rosseti (-4.66%). Currently, local supports in the ruble indicator are located at 3045 and 3020 points. Local support in RTS index futures is located at 151,000 and 149,000 points. Resistance is 154,000 points.
Redemption of bonds by the Federal Reserve eliminates the negative from the virus

Oil market.Futures on Brent and WTI completeJanuary is the strongest price decline since May 2019. Negative sentiment in the oil market continues to be fueled by speculation around the coronavirus. According to the players, due to its spread, energy demand can significantly decrease. In addition, pressure on the price of “black gold” was exerted on Wednesday by data from the US Department of Energy, according to which the country's crude oil stocks rose by 3.5 million barrels last week.

However, the good news for the “bulls” may beOPEC emergency meeting, which may be held in early February, and not in March. According to the Minister of Energy of Algeria and the chairman of the cartel, Mohamed Arkab, a decision on this issue should be made in the coming days.
Redemption of bonds by the Federal Reserve eliminates the negative from the virus

Ruble.Rapid drop in oil prices and increasingNegative sentiment in global financial markets last week became the main reasons for the decline in domestic stock indicators and the weakening ruble. Note that since the end of last year, impressive volumes of money from foreign funds have come to domestic stock and debt markets, which now, in the wake of the general risk aversion, have increased the sale of significantly more expensive Russian assets, thereby exerting pressure on the ruble. At this stage, support levels in the dollar / ruble pair are at 63.70 and 63.50. The main resistance level is 64.

Source:  clck.ru/M8F4F