By Chris Weafer

“More than any time in history, mankind faces a crossroads. One path leads to despair and utter hopelessness, the other to total extinction. Let us pray that we have the wisdom to choose correctly”

Woody Allen

Asian equities have extended Wall Streets move with a gain of over 1.5% for the MSCI Asia-Pacific Index at mid session today. Materials producers and industries linked to global economic activity are leading the gains. Most Asian developing market currencies are also trading better. That bodes well for Moscow's bourses and the ruble with steel and mining names expected to be amongst the leaders. Moscow trade will, however, be quiet

This note is also in the attached word format file. Detailed below is the usual commentary on what may drive the market/ruble/oil this week, Stock Watch, Market Diary, economy update and a brief review of last week's performance.

All markets will open Monday nervously and weaker after the news of a breakdown in the US debt talks. Investors in Russia and Europe will wait to see how the US markets open before making any major decisions. That said, weakness should be relatively modest as there is a strong consensus that a debt deal will be agreed before the August 2nd deadline and while that almost certainly will only be a stop-gap measure, it should still allow for a better market backdrop in August. Asia's markets are down, on average, by 1.0% at mid session today partly as those markets had already closed on Friday when concerns started to hit western markets.

By Chris Weafer

Chief Strategist, Uralisb Group

The positive momentum of the past week in global equity markets should at least extend into the start of the new week. Gulf markets were strong today and Asia’s markets will likely reflect Friday’s strong close in the US when they re-open on Monday. The first day of the new week will, however, be relatively quiet because of the Independence Day holiday in the US. How far last week’s rally extends will depend on whether this week’s economic indicators confirm the hope built by Friday’s ISM Manufacturing update, with Friday’s payroll report being the most important.