News background & trading ideas for 28/02/2019

The conflict between India and Pakistan has attracted surprisingly little interest in financial markets. But by that time there are downed aircraft and the open-armed clashes at the border. Recall, both States have nuclear weapons and have as well 1.5 billions of population for two. Yes, clashes in Kashmir are actually common, but this time everything can end truly bad. In this regard, we continue to remind about the feasibility of buying safe-haven assets. Such as gold in commodity markets and the Japanese yen in the foreign exchange market.

Yesterday was second statement day by Jerome Powell in Congress. However, we didn’t hear anything really new. Unless the Fed Chairman has added about the Tuesday’s announcement of the plan to suspend the reduction of the balance of the Central Bank.

The British Parliament, meanwhile, approved the amendment, which has confirmed in writing May’s authority over the possible postponement of Brexit’s terms. The pound continued a confident growth about this, which we are observing throughout the ongoing week. Despite the fact that it reached 1.33 marks in pair with the dollar, and the set doing great in terms of growth. So we continue to recommend pound’s purchases.

Once again we pay our readers attention to the feasibility of sales of the Russian ruble. The points are attractive for entry, and what is even more important, the fundamental background is appropriate for that. The USA released the text of the new sanctions bill. We are talking about the so-called "deadly" sanctions, which involve restrictive measures to participate in investment projects for oil and gas production (LNG), as well as the development of relevant fields. But restrictive measures are more than that. It has been also proposed to extend sanctions to new issues of OFZs and limiting the possibility of owning other debt securities of the Russian Federation and its subsidiaries to 14 days. The aim is to excommunicate Russia off all financial resources. It did not take long to see the results - recent investors are in a hurry getting rid of Russian Euro bonds because they are scared that soon they will not be able simply to sell it to anyone. Sberbank experts estimate that since last April, non-resident investments in Euro bonds have decreased by almost $600 million.

In the oil market, the situation has somewhat stabilized, and the movement has returned to the current base course - to the prices’ increase. This was partly due to a significant reduction in oil reserves in the United States, and to a greater extent to verbal interventions by Saudi Arabia that OPEC+ members will continue to cut their production. Also, news about the progress in negotiations between the US and China improve the fundamental background. Our intraday recommendation remains unchanged - we are looking for points for oil purchases.

Talking about today, we note that in terms of macroeconomic statistics the attention should be paid on GDP data in the US.

Our following tradings positions for today are: looking for points for dollar’s intraday sales in the foreign exchange market, buying oil within the day on the way down, buying safe-haven assets (gold and Japanese yen); selling the Russian ruble and buying the British pound.