| Key Central Bank rate | Current rate, % | Previous rate | Next meeting date |
| CBR | 16,00 | 16,00 | 27/07/2024 |
| ECB | 4,25 | 4,50 | 18/07/2024 |
| BOE | 5,25 | 5,00 | 01/08/2024 |
| FOMC | 5,50 | 5,50 | 31/07/2024 |
| o/n | o/n | o/n | 30 — Day Average | ||||
| RUONIA | 15,50% | MOSPRIME | 20,88% | ESTR | 3,6560% | SOFR | 5,336430% |
USD. Relative stability has prevailed on global platforms based on the results of the last few weeks.
The main event of June was the US Fed meeting, the likely outcome of which was widely discussed. The market analyzed the indicators and expected the beginning of the cycle of rate reduction from the record 5.50%. However, the regulator considered the beginning of easing premature and kept the rate at the same level. Thus, against the backdrop of high rates, the stock market continues its growth, the labor market is still strong, and inflation continues to decline. The Fed has taken a wait-and-see stance. Expected inflation for June according to the University of Michigan is at 3.0% (forecast 3.3%).
The US stock market feels stable and shows strong growth, with the top three indices DJ, S&P 500 and Nasdaq trading at 39,118.86, 5,460.48 and 17,723.83 respectively. Friday’s results showed a slight correction within 0.50% on average. The IDX.USD dollar index is near 105.20, which is the median level for the month. The yields on 2-year and 10-year treasuries are 4.7540% and 4.4150%, respectively.
EUR. The euro traded near $1.0700 by the close of trading Friday. The ECB became the first Western regulator to cut its key rate at its latest Meeting by 0.25% to 4.25%. The euro slid to $1.0650. Pressure came from comments from ECB spokesman Olli Rehn, who said that the ECB will cut interest rates two more times this year.
Eurozone statistics also disappointed investors — the IFO Business Climate Index in Germany fell in June to a multi-month low of 88.6. In addition, the consumer confidence index in June fell from -21 to -21.8. Weak macroeconomic statistics increased the likelihood that the ECB will go for another rate cut due to the deteriorating economic prospects of the largest economy in the Eurozone.
The euro continues to be influenced by statistics from across the ocean. It is expected that in the 1st quarter of this year the American economy grew by 1.4% (1.3% before). If expectations come true, the growth of the dollar may become a catalyst for the pair to fall below $1.0600.
Brent. The price of Brent rose on Friday and traded near $85.40 as concerns about disruptions to oil supplies from Russia and the Middle East largely offset fears of slowing demand. Fears of a larger war between Israel and Lebanon’s Hezbollah have made the market wary of oil supply disruptions. Thus, the price is rising given the geopolitical risk premium.
According to the US Department of Energy, crude oil inventories rose by 3.591 mio barr. (forecast -2.600 mio barr.) and gasoline inventories rose by 2.654 million barrels (forecast -1.100 mio barr.) in the last June. Military tensions and fears of fuel supply disruptions are forcing fuel supplies to build. The corridor for the coming week is $84.50-87.50.
RUB. The new sanctions package changed the principle of exchange rate formation and the trajectory of the RF currency market.
On June 12, the sanctions on the Moscow Exchange shifted currency trading to the OTC market, and a number of players began to reduce their positions in yuan. On June 13, Bank of China suspended payments from Russia in favor of recipients in the US and EU, which means continued low demand for currency from importers until the situation with payment logistics improves.
Decrease in imports for 4 months of 2024 is 10% in annual terms. The weak dynamics of imports was caused by difficulties with the fulfillment of cross-border payments, which have been observed in the Russian market since the beginning of the current year. Sale of export proceeds reached a record $14.9 bln in May 2024, which is comparable to the level of December 2023. Thus, the national currency exchange rate finds support from the participants of foreign economic activity.
Following the results of the next Meeting on June 7, 2024, the Bank of Russia kept the discount rate at 16%, which is also an important factor in favor of strengthening the ruble.
At the moment, the market is in search of equilibrium, but the trend towards appreciation of the Russian ruble is still obvious — during the first month of summer the ruble rose from $94.50 to $84.90. It should be noted the increased volatility of the OTC market. In the coming week, the ruble corridor and its dynamics will depend on the dynamics of export flows and the situation with external payments.