Markets are watching Trump and his NATO and Putin summits.
Markets are watching Trump and his NATO and Putin summits.
What equities to long in the current situation?
We have been talking about trading and investing problems of the world long enough to understand that soon there will be little to no safe assets left. But even with all of the financial problems in the world trading will not stop. Every financial crisis came and left with problems at the stock markets but even with unstable dollar there are traders who are willing to risk. And risk pays off quite often.
First of all, as weird as that would seem we think that the modern influence of dollar is not going anywhere. That is why it would be one of the most stable currencies in the world in case if financial crisis. Yes. Right now, it seems that in case there is a fall on equity markets dollar would the one to blame. But for years American currency has been the ultimate world benchmark and it is really doubtful that that is going to change especially considering that despite all of the crises in the world greenback always bounced back.
After dollar we would name Japanese yuan because it is one of the most stable currencies in the world. Of course, whose who follow equity markets know that yuan hasn’t had any big and sustainable gains for months now but there is just one thing about Japanese currency that makes it worth being looked into. That is the fact that there has been no rapid loses or gains for it. That means that yuan is not prone to unpredictable movements as it is. Central Bank of Japan is also not known for bad judgement and rapid moves with interest rates. So, there will be no 'sabotage' from the government of the country.
Swiss franc is the dark horse of the run, but still is very worth traders' attention. it has a very strong position on the international markets and due to the status of Switzerland in the world it may be one of the most stable currencies out there now and in time of various depressions. Looking at Swiss franc right now – with all of the problems in Eurozone and instability of dollar, franc is managing to keep a straight face. All of it is due to the neutral status of Switzerland in the world – no conflict is touching the country.
Of course, there are also assets outside the equity markets which can be longed in the low times in the markets, but equities are the one most independent among all of the financial instruments ate the markets.
Trump-Putin meeting is on the way.
Here we go again. Trump trying to make friends with the leader of the country that is shunned by the world. Multiple sanctions and restrictions have ruined Russia's economy and there is a good reason for why Russians are treated this way. War aggression against the neighboring countries is never met without complications. Especially in the modern world. But Russia doesn’t seem to mind. As doesn’t Trump. But if the world was excited to see Trump meeting Kin Jon Un and the economy of the US was on the rise at the moment that doesn’t mean that everyone is as excited for Trump-Putin summit.
There is no expectation towards the meeting. An investigation open about Russian meddling into the US elections and until it is proven that Russians had nothing to do with Trump's presidency we have the right to suspect the opposite. And that is why we are skeptical about the meeting? What are the two have to talk about anyway? The only pressure means that Russia has on the USA is oil. Brent has been doing extremely good lately and the prices have been surging higher and higher. WTI has also been growing, but still it can't reach Brent level of pricing.
National Russian currency ruble hasn’t been doing so well on the other hand. Of course, Russian economy is tightly tied to oil prices, but with weak national currency no commodity will ever help Russians. And Ruble has been falling. Today it is 0.26 percent down and the exchange rate is falling. Can Putin try and negotiate his way into the bright economic future? Quite possible. But what can Trump do in this situation? Technically Trump is tied with the international judgement and sanctions and in case he tries going awry he will land himself in hot water. And that is the last thing dollar needs right now.
There is also a bad message for ruble in Trump meeting NATO representatives first. That means that America values NATO ties more than connections with Russia. With that Russia is left with virtually no strong supporters. China that was the closest ally of Russia lately has been weakened by American tariffs. Saudi Arabia is mainly focused on oil output and other allies of Russia sadly can't be considered financial giants. With support like that or rather lack of thereof ruble is in big trouble. This means that Putin has to play it really safe during meeting with Trump.