Trump backs up, May and pound problems and ruble is in danger

9 mai 2019

Yesterday, the markets continued to watch with bated breath what was happening around the negotiation process between the US and China. Just before the start of the American session, a sigh of relief swept over the financial markets. It is about Trump's tweet, that the Chinese would come to Washington to conclude a treaty. But this time no aggressive rhetoric. The Fear Index (VIX) declined by more than 10% during the day,

However, it is still too early to relax and rejoice. On Friday, the United States is going to raise duties on Chinese goods worth $ 200 billion.
Bloomberg, meanwhile, has decided to calculate the “price” of Trump's tweets for stock markets. It was about $ 13 billion per word. It does not come cheap to financial markets.

Sad news for the pound is coming from the UK. It is about the lack of progress in negotiations between Theresa May and Labor leader Jeremy Corbyn. And this means that the hopes for a partisan compromise on Brexit are melting. Accordingly, it is not necessary to count on a happy ending in the near future. The pound was under pressure and it is understandable. However, the situation may change any time - new information from May or Corbyn may radically change the attitude of markets to the pound. Given the complete current uncertainty, we still refrain from working with the pound in anticipation of any clarity.

It is worth noting information from the Ministry of Finance of Russia regarding plans to implement the budget rule. So, from May 14 to June 6, 300.5 billion rubles will be spent on buying foreign currency, that is 16.7 billion rubles a day. For the ruble, this is definitely an alarming and extremely negative signal. Without excess supply in the market recently the ruble felt unwell. And the appearance in the foreign exchange market of 300+ billion rubles is a powerful factor of the downward pressure on the ruble. Recall that our position on the ruble remains unchanged - we use any of its growth for sales.

About our vision of the most promising positions for trading today. They are unchanged: buying of the Australian dollar and the euro against the dollar, sales of oil and the Russian ruble, as well as buying of gold and the Japanese yen.