“The trump bubble” has burst in the Moscow markets – The Washington Post

Financial markets were sent an interesting message about President trump and Russia. After the election trump investors seemed to be betting that sanctions against Moscow will soon be weakened. But that confidence vanished at the end of January, Russian stocks have fallen sharply.

This writes David Ignatius in the article “trump Bubble” has burst in the Moscow markets”, published on the website of the newspaper the Washington Post.

This is evident from the numbers: from November 7 (the day before the election) on January 27, the MICEX index of leading Russian shares rose 26% . The index of Russia’s financial stock has increased by 19% over the same period. But this rising tempo suddenly changed. As of Tuesday, the MICEX index fell by 10.4% from its peak in January, and the financial index decreased by 6.5 per cent.

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The strengthening of sanctions against Russia and reforms in Ukraine. Poroshenko spoke with senior officials USA

What happened on January 27? After several weeks of negative stories about possible links between members of trump’s campaign and Russia’s new President at a press conference said that it was “very early to talk about” the lifting of sanctions. With regard to a telephone conversation with Russian President Vladimir Putin, scheduled for the next day, trump kindly replied, “let’s See what happens.” According to reports both sides, the call was just to vague commitments of cooperation in the fight against terrorism.

Economists argue about whether markets reduce expectations or they are close to “random walks”. But in this case, the rotation seems pretty rational. Investors believed that something will happen, and then decided that it may not be.