UNITED STATES (VOP TODAY NEWS) — The Russian stock market is drifting down today amid falling Brent below the psychologically important mark of $ 70 per barrel due to rising US stocks and production and negative news about the course of the US-China trade negotiations.
In our opinion, the decision to escalate the situation and the threat from Trump to impose duties on goods from China are mainly related to the domestic political situation in the United States. There, in fact, the election campaign is already beginning, and the current president wants to show that he is fulfilling election promises amid threats to American hegemony in the world from China. Also, the discussed tweet of the head of the United States may be related to the intransigence of China on a number of issues sensitive to the States.
Also note that the stock market overseas is in good shape due to strong corporate reports, so perhaps it doesn’t really need additional support in the form of a Beijing and Washington trade transaction. At the same time, of course, a downward correction on the US stock exchanges in the event of a failure of the negotiations is very likely, and this in turn may adversely affect all global stock exchanges.
The latest positive macro statistics from the United States, in particular, the increase in jobs outside the agricultural sector, which amounted to 263 thousand in April against the forecast of 190 thousand, is deceptive. Good at first glance, it nevertheless reduces the likelihood of a reduction in the Fed’s key rate in the second half of the year and increases inflation risks.
Significant news on Russia, including corporate reports, is not expected in the current short work week, oil prices and US trade negotiations with China will be the focus.
This article is written and prepared by our foreign editors writing for VOP from different countries around the world – edited and published by VOP staff in our newsroom.
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