Global Market and Economic Update

The ruble has recovered slightly, trading at 67.79 per dollar, after ending Monday’s session over 6% lower at 68.79. The plunge followed yesterday’s move by S&P to downgrade Russia’s sovereign rating to junk due to weak economic growth prospects, low oil prices and Western sanctions. Russian share indexes opened lower this morning, although the ruble-based MICEX is now up by 1.6%, while the dollar-based RTS is still down by 0.8%.

Following comments from the Swiss National Bank’s Vice President Jean-Pierre Danthine, the franc fell today to its weakest level against the euro since the SNB abandoned its exchange-rate cap on Jan. 15. “We’re fundamentally prepared,” Danthine told Swiss newspaper TagesAnzeiger. “The central bank…remains ready to intervene in the currency market.” The euro jumped to 1.03826 against the franc from 1.0150 in early trading.

Brent crude prices steadied above $48 a barrel today, recovering from earlier losses as the dollar weakened against the euro. Prices were also supported after OPEC’s Secretary-General, Abdullah al-Badri, commented yesterday that prices may have bottomed and warned of a risk of a future jump to $200 a barrel if investment in new supplies was too low. Brent is0.7% higher at $48.49/bbl, while WTI is up 0.6% at $45.40.

Microsoft reported a fall in its quarterly profit that was in line with Wall Street forecasts, as the company struggled with the impact of a strong U.S. dollar and reduced demand for Windows software due to slumping personal computer sales. Net profit came in at $5.86B compared with $6.56B in the year-ago quarter. Microsoft (NASDAQ:MSFT) also set its financial forecast for the remainder of the fiscal year, which ends in June, below Wall Street estimates. MSFT -6.8% premarket.

Democrats in the U.S. Senate blocked the Keystone XL (NYSE:TRP) pipeline bill from moving forward on Monday, prolonging the chamber’s debate over the project. Senators voted 53-39 against a motion that would have allowed a vote on a final bill; it needed 60 to pass. Citing a continuing review process by the State Department, the White House has said President Obama would veto the measure should it reach his desk.

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