The end of February and the beginning of March reminded the markets of volatility and corrective threats. Moreover, for bond markets it was no longer a reminder, but a statement of a problematic situation. However, the massive fall from a year ago is still in the memory. And this is good, because it does not allow the markets to go into a deep dive. It happened this time too. Bonds stopped, stocks turned up. And I would not wait now for the continuation of the fall of those and others.
As for domestic bonds, OFZs with a high probability showed the minimums of their quotes and maximum yields. Inflation in February reached 5.7% on an annualized basis (January – 5.2%, December 4.9%), plans to tighten monetary policy by the Bank of Russia have been announced, and this news is in prices. Only a continuation of the inflationary gallop can destroy the balance. But the authorities are showing a nervousness in relation to inflation that is incomparable with last year, which gives hope for stabilization.
The ruble, in turn, is stable regardless of inflation or bond trends. In my understanding, there are more chances of strengthening it. The EUR / RUB pair imperceptibly approached 88, and these are the lows since last September. Uninteresting trends tend to continue. Perhaps ahead of 85 rubles per euro. Probably, both the area of 73 rubles per dollar, and its overcoming downward are attainable goals. Although the very potential for the strengthening of the ruble, I consider moderate.
The behavior of the EUR / USD pair is interesting. At a rapid pace, it dropped below 1.19. The fact that the pair has shown highs and is ready to return to 1.1 or so, has been said more than once, mainly last fall. And I don’t change this idea. Perhaps now we will see some kind of rebound, but the downward trend itself is most likely far from complete.
A rising dollar is a minus for stocks. But today the stock markets are ready for a leap higher again. This also applies to the American S & P500 index, and the Russian RTS or the Moscow Exchange index. Our shares are now moving depending on overseas. The latter, apparently, will update the maximums on the underlying indices.
Oil. The commodity where the rally is most noticeable is, of course, oil. It looks like the rally itself is ending. Although I would not expect a sharp downward reversal. So far, rather, the transition from the growth phase to the phase of consolidation.
Whereas no less noticeable, but already negative trend in gold is still capable of development. It is unlikely that $ 1,700 / oz. become a reference level. Lower grades apply for this role, 1,650 – 1,600.
Not an investment recommendation
On the graphs:
– index of net prices of Russian government bonds
– USD / RUB pair
– EUR / RUB pair
– EUR / USD pair
– futures on the S & P500 index
– RTS index
– Brent oil
Sources: profinance.ru, moex.com