Ruble Rising and Risk of US Government Shutdown. Financial Market Review, September 29

The Russian currency is strengthening as the peak of the tax season passes, but the ruble may begin to weaken in the coming days. Congress has not yet passed the funding bill, so either a full or partial shutdown is possible.

Currency

The Chinese yuan exchange rate fell on the Moscow Exchange during the trading session on September 29. By 7:00 PM Moscow time, the yuan exchange rate was 11.54 rubles, down 6 kopecks from the previous trading close.

The official exchange rate of the US dollar against the ruble, announced by the Bank of Russia on September 30, fell by 0.74 rubles to 82.87 rubles. The official exchange rate of the euro against the ruble, announced by the Bank of Russia on September 30, fell by 0.54 rubles to 97.14 rubles.

The Central Bank of the Russian Federation calculates official exchange rates based on data from credit institutions' reports on the results of interbank conversion transactions on the over-the-counter foreign exchange market.

On the global currency market, the dollar index against a basket of six major currencies (DXY) fell and by 8:30 PM Moscow time was around 97.9 points.

The dollar is weakening amid the risk of a partial US federal government shutdown. The main concern for markets now is the risk of a partial US government shutdown starting October 1 if Congress fails to pass a funding bill before the end of the fiscal year on September 30.

According to analysts, the dollar typically weakens before such events but rebounds after the funding disputes are resolved. Investors will likely perceive this as an additional negative factor for the already slowing labor market. If a shutdown occurs, it will impact the release of US labor statistics on October 3.

Stock

The main trading session on the Moscow Exchange ended with declines in key indicators. The Moscow Exchange Index fell 1.5%, closing at 2,683 points. The RTS Index fell 0.7%, closing at 1,020 points.

Key US stock market indicators showed weak, mixed performance in the first half of the trading session. By 8:30 PM Moscow time, the Dow Jones Industrial Average had fallen 0.2%, the S&P 500 had gained about 0.1%, and the NASDAQ-100 had risen 0.4%.

Oil

Oil prices fell on the evening of September 29. By 8:30 PM Moscow time, Brent crude futures on London's ICE Futures exchange were trading at around $67.50 per barrel. By that time, WTI crude futures on the New York Mercantile Exchange were trading at around $63 per barrel.

OPEC+ countries are prepared to increase production again in November by at least 137,000 barrels per day, Western media reports , citing sources. The meeting to discuss November's quotas will take place on October 5.

Furthermore, oil prices are being pressured by news that oil supplies from Iraqi Kurdistan via Turkey have resumed after a hiatus of more than two years. Kurdistan will supply 180,000-190,000 barrels per day to the Turkish port of Ceyhan, according to Iraqi Oil Minister Hayain Abdul Ghani. Future deliveries are planned to increase to 230,000 barrels per day.