Investor sentiment in emerging markets remained fairly mixed on Thursday. On the one hand, the appetite for risk was clearly not helped by the news about the next postponement of the signing of the trade agreement between the leaders of the United States and China, as well as statements of several representatives of the Fed about the absence of the need for further easing u.S. interest rate. On the other hand, media reports about the agreement of the United States and China to gradually reduce trade duties restored optimism among investors, maintaining a high chance of a peaceful settlement of the trade conflict. In such conditions, there was no clear dynamics of currencies in emerging markets on Thursday, but by the end of the first half of the day the dollar gradually entered the negative zone on most platforms.
By mid-afternoon, the ruble was among the currencies strengthening against the dollar (about 0.2%). industrial production in Germany. In the afternoon, trading platforms expect the publication of important data on the labor market in the U.S., but the main factor determining the appetite of investors for risk, will remain the news background on the trade issue.
More than 1 trillion rubles returned to the system on the local interbank market the day before. from the one-day deposits of the Central Bank, therefore, we can expect a resumption of the correction of IBC rates, which has been observed since the beginning of November under the influence of inflows of budget funds. In turn, the Federal Treasury will hold another foreign exchange deposit auction with a limit of 1.5 billion dollars, but the demand is unlikely to exceed half of this amount, as the previous day the banks returned $600 million in “old” deposits.
Yuri Kravchenko, Head of Bank And Money Market Analysis at Velez Capital