| Key Central Bank rate | Current rate, % | Previous rate | Next meeting date |
| CBR | 16,00 | 16,00 | 07/06/2024 |
| ECB | 4,50 | 4,25 | 06/06/2024 |
| BOE | 5,25 | 5,00 | 09/05/2024 |
| FOMC | 5,50 | 5,50 | 12/06/2024 |
| o/n | o/n | o/n | 30 — Day Average | ||||
| RUONIA | 15,86% | MOSPRIME | 20,88% | ESTR | 3.88900% | SOFR | 5.3200000% |
USD. The sentiment on global platforms is formed around expectations for the key rate of the US Federal Reserve System and prerequisites for its change.
The first estimate of GDP for Q1 2024 published by the US Bureau of Economic Analysis turned out to be significantly below market expectations. Growth (QoQ) slowed sharply to 1.6% after 3.4% in 4Q23 (forecast 2.5%). Thus, in 1Q2024, the US economy grew at its slowest pace since mid-2022.
Inflation figures turned back to growth after a temporary decline in 4Q2023, deviating strongly upward from the Fed’s 2% target. The Core PCE, excluding volatile energy and food prices, has accelerated to 3.7% after two quarters of being near target (2%), which is in line with the 2Q23 pace (3.4% forecast).
Thus, as time passes, uncertainty in the Fed’s future actions increases.
The dollar index IDX.USD is still in market favorites at 105.5070. The yields on 2-year and 10-year treasuries are 4.9370% and 4.6330%. Of the leading indices, the tech-heavy Nasdaq suffered the biggest losses, with a weekly drawdown of more than 3% to 15,587.63.
EUR. The euro recovered its positions a bit and is trading quite confidently near $1.0720. The price was supported by weak GDP statistics from the USA. On the European market itself, the week passed without any special shocks. The market follows the inverse dependence on the dollar index IDX.USD. As soon as the dollar weakens its grip, the euro raises its head.
Some statistics. Manufacturing PMI (Apr) showed a decrease to 45.6 (forecast 46.5), IFO German Business Climate Index (Apr) slightly increased to 89.4 (forecast 88.9). Analysts attribute the improvement in the business climate to the seasonal revival of business.
In the coming week, the key event will be the US Fed meeting and its decision on the rate, so we should expect volatility revival in the resistance area of $1.0770.
Brent. The asset is trading near $85.30 per barrel at the close of trading on Friday. The macroeconomic background forms a bearish mood in the commodity market — the IMF predicts an increase in OPEC+ quotas from the middle of the year, the U.S. dollar is strengthening, and stock indices are declining. All these factors can be offset by the news from China, where business activity in the industrial sector in April reached the maximum since February 2023. The growth in production may indicate in favor of stable demand for «black gold» on the part of the world’s largest importer, which keeps the achieved price level above $80 per barrel.
After the publication of weekly data from the US Department of Energy, the pressure on the price increased — the growth amounted to 7.27 mln barrels (forecast -2.3 mln barrels). The best scenario for the coming week will be the range of $82.50-85.50 per barrel.
RUB. The Bank of Russia decided to leave the rate at the current level. The key rate in Russia is still 16%. The market reacted with restraint to the decision of the Central Bank of Russia, but the ruble strengthened to $91.20.
In March, annual inflation amounted to 7.7 y/y (February: 7.7%). Monthly price growth was 0.39%. But the seasonally adjusted annualized inflation rate (SAAR) was about 5%, as expected. The indicator has slowed somewhat, but due to one-off factors. There are no hints yet of a stable decline in inflation.
According to the Ministry of Finance, the RF showed a rather large current account surplus in Q1 2024, which amounted to $22 bln. This was facilitated by export revenues and rather high prices for raw materials. Exports in March amounted to $40 bln vs. $30 bln in February. Import volumes were down 11%.
Ahead of the long May holidays, we should not expect significant volatility in the market, so keeping the current trading corridor within $91.50-93.50 is relevant.