S&P500.
The US stock market has rebounded from the yearly lows.
The ruble is trying to find resistance.
Major US stock indices plunged on Friday. However, then they rebounded: the Dow Jones added 0.1%, the NASDAQ fell by 0.3%, the S&P500 went up 0.1%.
The S&P500 is trading at 3901, the range is 3880 - 3960.
The S&P500 futures opened the week rising by 1%.
The key US index hit new yearly lows, but surged. Therefore, no new closing low was recorded. It is a positive signal for traders who continue to believe that the current market decline is a deep correction rather than a real downward trend. From that perspective, the current buying points are extremely favorable.
Technically, the market fell by 20% taking into account the S&P500. It's a signal for the market to decline. However, this aspect has probably boosted sales. Moreover, the real economy remains strong as well as the labor market.
This week, the news background is weak. The key event, the US inflation report for April, will be released on Friday, May 27.
Energy: Oil prices remain bullish due to the hostilities in Ukraine. Brent crude oil is trading at $113 this morning. It has risen by 1%.
The ruble strengthened significantly last Friday, the dollar was worth 57 rubles. However, the ruble then rebounded dramatically. See more detailed information below.
A global food crisis is another hot topic. Sudan has been expanding its wheat acreage. Countries around the world are increasing their production levels as well. Moreover, Russia and its invasion of Ukraine is the major focus of discussion. Russia's navy ships block Ukraine's Black Sea ports, Odessa and Nikolayev in particular. According to various estimates, Ukraine has nearly 20 million tons of grain in storage. Huge volume of shipments is the key reason why it is inexpedient to transport grain to other ports by train.
The USDX is trading at 102.60, the possible range is 102.30 - 102.90. The dollar is gradually declining. However, the current situation resembles a correction. It is better to analyze the inflation report when it is published.
The USDCAD is trading at 1.2790, the range is 1.2700 - 1.2900.
Conclusion: The US market may start rising. However, it is extremely significant whether the report on Friday will show a slowdown in US inflation.
Ruble: Experts explained the current situation with the ruble. There are two reasons for its strengthening. Russia's central bank has a further tough stance on the sale of 80% of foreign currency proceeds by exporters. Moreover, strict rules concerning the withdrawal of foreign currency abroad cause difficulties with imports. However, the central bank does not plan to relax the rules, though the ruble's exchange rate has strengthened significantly. The key reason for it is that Russia's central bank and the Kremlin fear that the capital outflow from Russia will dramatically increase due to the hostilities in Ukraine. At the same time, the Ministry of Finance has problems with fiscal revenues due to the ruble's high exchange rate. The budget was drawn up at the rate of 72 rubles per dollar, while the price of Russian oil is much lower than the exchange rate. Therefore, Russian oil is sold at a discount of $35 per barrel due to the US and EU sanctions.
Russia-Ukraine military conflict: Russian troops continued their attacks and strikes in the direction of Severodonetsk - Bakhmut - Sloviansk. Besides, there is a clear shift to positional combat in other sections.
US President Joe Biden has signed the $40 billion aid package to Ukraine. Therefore, US humanitarian and military aid is being loaded into the ships. The second meeting of 40 countries concerning aid to Ukraine is scheduled in Ramstein Air Base today.
Russia-Ukraine peace talks: The Kremlin has redoubled its efforts to force Germany and France to press Ukraine to make territorial concessions. Moscow's current goal is to force Kyiv to accept the fact that Russia will annex Kherson for the long term. According to the Kremlin's plan, Kyiv must recognize Crimea as Russian territory and recognize the DNR and LNR on the borders of the regions. However, Ukraine definitely ruled out any territorial concessions to Russia and demanded its retreat to the border on February 23. This was the broad outline of the negotiations on the morning of May 23. Tomorrow, there will be exactly three months of the Russia-Ukraine military conflict.
