Russian Central Bank Rate Forecast: Will There Be Monetary Easing?

Fundamentals

The trading day was rather quiet yesterday. The market was digesting the results of the first round of the French election. With the centrist Emmanuel Macron in the lead, the euro saw a sizable gain at the opening. Macron and Marine Le Pen face off in the second round, two weeks from now on May 7.
In Russia, the ruble was doing fine, too. The RF Central Bank meets on Friday, and it is expected to take further steps to ease its monetary policy. Analysts are expecting a cut in the key interest rate to 9.5%. We can therefore anticipate that the market will be counting on a rate cut of 25 basis points. If the Central Bank is more aggressive, the ruble will likely lose a part of what it has gained. One should also take note of purely technical matters, i.e., mineral production taxes are due on April 25 and profit taxes on April 28. Consequently exporters will be selling foreign currencies and buy rubles. Experts estimate that the mineral production tax due from exporters is around 280 or 350 billion rubles.
Markets in Australia and New Zealand are closed Tuesday. In terms of global fundamentals, the US consumer sentiment is expected to be released at 2 PM GMT, as are the new home sales for March. This number expected to go down to 583,000.

Stocks

Among earnings reports, AT&T should be noted. Its EPS is expected to rise to $0.74. Coca- Cola, Caterpillar, and McDonald's, all traded on the NYSE, also report their earnings today. We advise watching the fast food giant. It has been rising for a fairly long time, so in the long term there is a strong bullish trend.
Overall, the US market managed to gap up Monday. Traders may try to close the Dow Jones price gap. Technically, however, there is a buy signal – the MACD is crossing the signal line. We think it makes sense to wait until movement in a particular is confirmed. We can’t talk about resumed growth until the DJIA hits a high at 21,000.
In Russia, the MICEX Index has broken through the 9-day EMA on the daily charts. Appel’s moving average convergence/divergence (MACD) is also giving a buy signal. Technically, the pair is trading near the resistance at 1,980, where the middle Bollinger Band is located. If the breakthrough is confirmed, there may be a short-term reversal.

Currency Market

According to wave theory, the EUR/JPY pair is trading within an impulse wave with a target at 121 yen per euro. Meanwhile, the charts have formed a widening triangle  a correction pattern. How the asset behaves next depends on which wave the pair has been trading within before this. Technically, the uptrend may continue. The pair has made a gap up. The question is, what kind of a price gap it is. If it's a trend continuation gap, it may close. However, even if it does close, the bulls might keep attacking.
The EUR/USD pair managed to get above the upper Bollinger band Monday, forming a price gap up. For the time being, the pair is testing the resistance at 1.0860, which is a 100% Fibo retracement compared to the previous downtrend. Two scenarios are possible. The first and the most likely one is that the gap will close. In this case we see the pair falling by around 100 pips. The second scenario is a continuation of the current trend with movement toward 1.1000 as the target. This scenario is feasible, but it hinges directly on the results of the second round of the French election.

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