Rumors Fill the Air: Will Putin Meet Tillerson and What Will This Meeting Bring?

Fundamentals

The Fed’s Janet Yellen spoke Monday. In light of the growing geopolitical risks, her speech was more than cautious. Yellen stated the Federal Reserve would be focusing on maintaining the results it had achieved. In particular, she mentioned that, to avoid the need for an abrupt interest rate increase, which might certainly lead to a recession, monetary authorities must act cautiously, without “pressing on the accelerator,” too hard and monitoring the situation in order to prevent the next bubbles.
Speaking of geopolitical risks, US Secretary of State Rex Tillerson’s visit to Moscow should be mentioned. The Kremlin has not officially confirmed that Russia’s President Putin will meet with the Secretary of State. However, it is rumored that the meeting will take place this afternoon. It still remains to be seen whether or not these rumors are actually true. Time will tell.
It’s no secret that the Secretary will press the US position that Russia must stop supporting Assad. It is also quite easy to guess how the RF President will respond. The overall situation is putting additional pressure both on the ruble and commodities such as crude and gold, which will react keenly to news regarding this issue.
When it comes to the ruble, we can’t but mention the Ministry of Finance’ statement regarding capital outflow from Russia. Vladimir Kolychev, Deputy Finance Minister, said the outflow in 2017 would be 1% to 1.5% of the GDP, and that this might weaken the ruble exchange rate.
The Bank of Canada’s decision on the key interest rate is being released today at 2 PM GMT. The rate is expected to remain unchanged at 0.5%. The BOC press conference with the usual commentary will be taking place at 3:15 GMT.

Stocks

Here are some earnings reports you may want to monitor today: Delta Airlines is expected to report a drop in EPS to $0.74; Fastenal, an American distributor, also releasing its report today, may increase its EPS to $0.46.
Meanwhile, the US Dow is still flat. As mentioned before, the longer this trend lasts, the stronger the exit from it might be. The most important question is, of course, in which direction. Technically, the DJIA is now trading between 20,500 and 20,750 on the daily charts. We think that investors will continue to trade within this channel.

Currency Market

The AUD/NZD pair is still headed downward. The support is seen at 1.0750 and the resistance at 1.0850. Technically, the MACD attempted to reverse, but the bulls clearly didn’t have enough power for a counter-attack. Thus, expectations are negative for now, at least within 30 pips.
The NZD/CHF pair is trading sideways. The price is now diverging with the MACD. The bears may resume their attack on the pair, with the support at 0.6950 (the lower Bollinger Band).

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