Close a Couple of Fast Food Restaurants? Russia’s Reaction to New Sanctions

In foreign affairs, US-Russian relations are starting to take a new turn. Russia, naturally, threatened retaliation to the sanctions adopted by the US Senate. In particular, on Twitter Alexei Pushkov again mentioned McDonald’s, which, according to the politician, “is no sacred cow.” The US company has yet to react officially to these statements. However, the company’s stock price on the New York exchange dropped at the opening, falling below $158. Technically, it was time for a correction, which just might extend to $10. Among the fundamental news that might prompt the US market’s response today, the regular announcement of the number of initial jobless claims and the change in durable goods orders may be of interest. In Russia, the Central Bank’s international reserves, which the Bank continues to build up, will be published.

Alas, because this article was written before the Fed’s meeting, we unfortunately cannot fully evaluate the open market committee’s decision or the commentary on it. The EUR/USD pair is bracing itself in expectation. Technically, a bullish flag has formed on the daily charts, figuratively speaking, the spring has been squeezed, but its release depends directly on how much market players believe in the FOMC’s further decisive actions. Yesterday, passions were running high over Obamacare. The discussion resumed over what amendment to adopt and what the possible consequences for American pocketbooks might be.

The GDP figure released yesterday in the UK disappointed traders, although it aligned with the consensus forecast. Growth fell and, compared to the last quarter, was only 1.7%. The GBP/USD pair immediately reacted by a strengthening of the dollar, but later this was canceled out. We think that it was not so much the pound, as uncertainty over the dollar that played a role here. Yesterday, the Old Lady sounded the alarm about an EU bill imposing a five-day moratorium on payments from banks that are being restructured. Market mechanisms for settlements, including those related to derivatives, may be disrupted, and not without reason. Among fundamental news about the euro: today at 8:00 am GMT the Eurozone M3 money supply will be announced; and in the UK retail sales based on Confederation of British Industry will be released.

Nikolay Dudchenko, Olymp Trade

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