Analyst: the markets will continue anxiety due to a virus and geopolitics

market sentiment at the beginning of this week “may be anxiety,” and “the viral threat is too early to write off”. This opinion was expressed by the economist “BCS Premier” Anton Pokatovich.

According to him, last Friday, “the transition of markets towards avoiding risk has put pressure on oil prices and the ruble currency”. “Tensions between the US and China again showed himself, moreover, weak data on U.S. labor market alerted investors. In some countries, a return to restrictive measures because of COVID-19, it is clear that the viral threat is too early to write off”, — stated in the review of the expert.

In his view, “the external environment will continue to define the news in the virus and the geopolitical plane.”

for its part, the financial expert CEX.IO Broker Alexander Anuk notes that “on the quotes of the ruble, pressured by political uncertainty in the country due to unrest in the Khabarovsk region, as well as instability in the energy market, where the restoration of balance of supply and demand remains very fragile.” “The fall (last Friday) the Central Bank interest rates by 0.25% (to 4.25% per annum — ed.) was not a surprise to the market, it is rather “cosmetic” continued easing of monetary policy that is unlikely to have a significant impact on the Russian currency market”, — the expert believes.

we also Recall that the Russian national currency since the beginning of this year has significantly depreciated against the dollar and the Euro. Strong pressure on the rouble had a General panic in the financial markets due to the rapid spread of the pandemic coronavirus infection COVID-19 and concerns about its impact on the global economy, and a collapse in oil prices.

So, the strong devaluation of the Russian currency occurred on March 7 on the international Forex market, after day previously collapsed deal OPEC+, — countries of the Alliance are unable to agree on cutting oil production, nor of the extension of the deal for a longer period (1 April 2020). Then, on March 9, 2020, the financial and oil markets suffered “black Monday”, and on 18 March, the market embraced a “black Wednesday” with yet another collapse of oil prices, the Russian national currency in the course of trading on the Moscow stock exchange has updated (at the time) a record low against the dollar and Euro since February of 2016, 81 and 88 million, respectively.

we Add that the real effective exchange rate of the ruble (inflation-adjusted) in June 2020 rose 2.9% against foreign currencies relative to the previous month. In this case the real rate of the ruble against the dollar rose during this period by 5.2%, to Euro — by 1.7%. However, for the first 6 months of the current year the real effective ruble exchange rate decreased by 5%.

On Monday the Bank of Russia set the official dollar exchange rate at the level 71,5974 ruble, Euro — ruble 83,1031.

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