Ukraine Gas Supply Offers Time for a Deal: Amoroso

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June 17 (Bloomberg) -- Anastasia Amoroso, global market strategist at JPMorgan Funds, examines the impact of Russia shutting down the flow of gas to Ukraine, payment negotiations between the nations and her investment strategy for Russia and Ukraine as the unrest continues. She speaks on Bloomberg Television’s “Bloomberg Surveillance.”

My headline this morning -- everybody is up to their eyeballs in natural gas, is that true?

In ukraine they are and at europe as well.

There is plenty of gas in storage.

That is the reason why there is not this pressure to negotiate this deal now.

That is the reason why there is room for a deal to break down.

It will have to happen before december.

There is unit analysis.

And there is price analysis.

You talk to your hydrocarbon experts at jpmorgan, do they suggest we should watch price negotiations?

I think it is price.

The european customers paid $3.80 is the price versus $4.85 which is what the ukrainian customers are now facing.

There's is divide that needs to be bridged.

Any deal will hinge on price.

China signed the deal and we don't know what that price is.

That is by design.

How far along are we in this?

You said the tensions have eased a little bit but will they get worse before there is a resolution?

I think we are quite far along.

If you look at the performance of the russian stock market or the ukrainian stock market since late april, it has rallied quite a bit.

The reason for that is what when policy makers find common language and when they look forward together to -- the stock markets move up and that's what happened.

Because vladimir putin agreed to the roadmap set out why the organization in europe, because he did not obstruct the election and is on speaking terms am a that a significant.

There is room for the deals to break down and the violence in ukraine is still heartbreaking but from the market perspective, when policy makers do find a way to be in the same room together and talk, that helps.

As an investor, how do you resolve the fact that we are negotiating price on one hand and on the other hand, 49 keiper will kill -- 49 people were killed over the weekend?

How do you resolve that?

It's all about the setup and the catalyst.

The setup for russian stocks is the price to earnings ratio.

The expectations are extremely low.

The catalyst repels the stock higher and that is the notion that there will be de-escalation overtime.

It takes baby steps to get there.

That is what causes the market to go higher.

We may see the headlines which are unfortunate but it does not prevent the market climbing.

Are you long and russian stock.

I am, the premise there is when policy makers do it.

The constructive tone, that means that eventually the talk of sanctions will subside.

It is not that the talks are completely alter table but it is not dominating the headlines as much.

Couple that with some reforms that russia implemented and couple that was slightly better day to come i think you get the upside to the market.

Year to date, the russian exchange currency adjusted in u.s. dollars is down about six percent.

When this ukraine-russia tension blew up, it had this chilling effect on the rest of the emerging markets.

Will it continue to do that?

Yes, but it is diminishing.

Even though the russian stock market is down six percent for the year, it is up about 17% since late april.

There is not optimism but better relationship between china and russia now.

That is giving a boost to some of the emerging markets.

There is a soccer contest going on in brazil.

Are you long on brazil?

Mohamed a larry and -- mohamed el-erian said take chips off of the table.

Do we need to lighten up on investment?

Not fully, yes, the oil spike and perhaps cause investors to take some chips off the table but when i look at the number of investors out there that are stuck in neutral -- if we look at the readings of investors that have a neutral outlook for the next six months, it is add two-year all-time high levels.

The level of conviction is low and when that's the case, it means the trend will go up.

Maybe that is the new neutral.

Maybe it is investors stuck in neutral.

I don't disagree with that.

When mohamed el-erian speaks coming makes headline.

What you think about the world cup?

I knew you were going to ask me that.

I have to think carefully.

Usa, of course, all the way.

, i.

This text has been automatically generated. It may not be 100% accurate.


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