Start Monday after the weekend, three points of interest! ～Highlights and schedule for March 4～

Over the weekend, President Trump said,

"We are seeking a dollar level that is favorable to the United States. We are not looking for a dollar so strong that it hinders foreign business transactions."

"There is one gentleman inside the Fed who likes higher interest rates, quantitative tightening, and a very strong dollar."

"Can you imagine what would happen if rates were kept unchanged and we did not implement quantitative tightening? I think the dollar would have weakened a bit more."

These remarks caused the dollar to weaken and opened with a gap.

Also, the pound rose and opened with a gap due to Barnier, the EU's chief negotiator for Brexit, saying that he is ready to give assurances that the backstop is temporary.

◎ Today’s Highlights

1) U.S.-China trade talks

Trade talks between the U.S. and China and the additional tariffs on China have been postponed since the end of last month. Some reports indicate there has been progress. It is unclear how far progress has been made, but will there be an agreement? What will happen to the additional tariffs? It is worth watching. If there is a U.S.-China consensus, we could see a risk-on move, but China has its own issues with Japan-U.S. trade talks ahead. In the U.S.-Japan trade talks, there are concerns about currency provisions. If currency provisions come up, the likelihood of yen appreciation increases. Even if there is a U.S.-China consensus and a risk-on mood, we should be careful about whether the yen will continue to weaken.

2) AUD and the RBA Board

The above U.S.-China relations also affect the Australian dollar, and the RBA Board meeting is scheduled for tomorrow. In the previous meeting, the Australian dollar exhibited volatile movements due to rate-cut fears. There is a possibility of moves before this meeting as well. Be careful with the AUD’s movements.

3) Geopolitical risk

There are risk-off catalysts such as deteriorating relations between India and Pakistan, impeachment concerns over President Trump regarding Russia allegations and obstruction of justice, and the U.S. extradition issue involving Huawei's CFO. The spark could ignite at any time. Please stay attentive.

◎ Today’s Economic Event Schedule

Monday, March 4

09:30 AUD Building Permits

16:00 TRY Turkish CPI (Consumer Price Index)

18:30 GBP Construction PMI

Tuesday, March 5

National People's Congress (NPC) in China — to the 15th

10:45 CNY Caixin Services PMI

12:30 AUDRBA Policy Rate and Statement Release