15.01.2020: Oil and RUB lack momentum amid downbeat fundamental factors (Brent, USD/RUB)


Market participants are not very active on
Wednesday as investors are waiting for the details of the phase one trade deal that is
to be signed today. The ruble keeps holding near the level of
61 against the US dollar. Oil is extending weakness as crude stockpilesin the US are rising. Oil and other risky assets came under pressure
after comments from the US official about trade agreement with China. Investors are disappointed as the trade conflict
seems to be not fully resolved yet. US Treasury Secretary Steven Mnuchin said
late on Tuesday that Washington intends to keep the existing tariffs on Chinese goods
until the second phase of the agreement which will take place after the presidential election
in November. This decision may lead to active profit-taking. Oil prices dropped on Wednesday. It seems that the long-awaited signing of
the phase one trade deal will not anyhow support the oil. Early in the day, Brent crude lost 0.33% and
is currently trading at 64 dollars 28 cents a barrel. West Texas Intermediate is also extending
losses. Today, one barrel of WTI crude costs 58 US
dollars. Data from the American Petroleum Institute
puts additional pressure on commodity prices. According to API, crude inventories in the
US were up by 1.1 million for the last week, while analysts expected a decline in stocks. Activity in financial markets is rather sluggish
today, as traders are evaluating an announcement made by Washington on Tuesday. Most currencies, including the ruble, display
weak dynamics. Traders are unlikely to take any further steps
before the details of the trade deal are revealed. As for the local factors, the Russian currency
will be mainly influenced by the auction placement of the federal loan bonds first time this
year. The news agenda is also shaped by the annual
address of Russian President Vladimir Putin. The ruble has marginally eased against the
US dollar opening today’s session in the red zone. The dollar/ruble pair has settled at 61.46. Yesterday, the ruble managed to resist the
downward trend thanks to export revenue sales and Brent’s attempts to break the level of
65. Today, market participants will mainly focus
on the completion of the US-China trade deal. In the nearest future, investors’ appetite
for risk assets, including the ruble, will depend on the results of the phase one agreement

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