As an asset’s price incorporates all relevant information, financial markets depend on Donald Trump’s tweets. Emotional remarks from the US leader are included in fundamental analysis as market-moving events. The Russian markets are especially sensitive to them.
A few days ago, Donald Trump made the Russian stocks to incur heavy losses with just one comment. He told the Kremlin to get ready for a missile attack on the Assad regime despite Russia’s objections. “Russia vows to shoot down any and all missiles fired at Syria. Get ready Russia, because they will be coming, nice and new and “smart!” You shouldn’t be partners with a Gas Killing Animal who kills his people and enjoys it!” The market instantly showed a negative response. Half an hour later, Trump posted another tweet, saying that he is ready to help Russia with the economy. This enabled Russian companies to recoup some losses. Eventually, the Russian stock market revived after the US leader had decided to cancel a new portion of sanctions against Russia.
Experts say that the Russian market is vulnerable to the Twitter diplomacy. Verbal interventions from Washington are able to drive a rally and cause losses of the Russian stocks. This is what happens on a daily basis. Unfortunately, statements and decisions of the Russian policymakers are of minor importance to the domestic assets and a forex rate of the Russian ruble.
