A Historic Week for the EU and the UK!! ~ Highlights and Schedule for the Week of March 11 ~

Last week, at the ECB Governing Council, the outlook for the economy was revised downward and additional easing was announced, shifting the rate-hiking timetable to next year and turning dovish. The euro was sold off significantly, and stock prices fell sharply.

Additionally, the U.S. employment report showed a disappointing gain of 20,000 jobs, which also contributed to risk-off sentiment. This week, all eyes are on whether this trend will continue.

Other major focus is Brexit—how it will unfold! It’s the biggest cliffhanger. All attention is on the UK.

This week, trading hours changed because the U.S. observes daylight saving time. Please pay attention to the timing.

◎ This Week’s Points of Interest

1) British Parliament Vote

This week is poised to be a historic one for both the UK and the EU. Three key questions: Will the Brexit bill pass? Will a no-deal Brexit be approved? Will the deadline be extended?

March 12 (Japan time March 13, 4:00)

The Brexit bill, including all prior amendments, will be put to a vote in the UK Parliament.

March 13 (Japan time March 14, 4:00)

If the Brexit amendments are rejected, Parliament will vote on whether to pursue a no-deal Brexit. If approved, a no-deal Brexit would result.

March 14 (Japan time March 15, 4:00)

If the Brexit amendments are rejected and no-deal is also rejected, Parliament will vote on whether to extend the Brexit deadline. If approved, the March 29 Brexit deadline will be extended.

Since this is a UK decision, even if it is approved, it only decides the internal UK matter; negotiations with the EU are separate. Therefore, outcomes agreed in Parliament this week will be used to negotiate with the EU to determine the removal method. Also, if May’s Brexit bill is rejected on the 12th, a second referendum could be proposed on the 13th or 14th. Where the decision will be made is unclear, but this is a moment that will determine the future of the UK and the EU. The focus is high, yet the time window is around the NY close, a period of low liquidity. I will be mindful of potential crash-like moves.

2) Bank of Japan Policy Meeting

Last week, with the ECB’s lending program TLTRO announced and the outlook revised downward, the ECB shifted toward accommodative measures. Following the Fed, the ECB, and the RBA easing stance, the BOJ is also rumored to consider additional easing. The key is whether additional easing will be announced at this BOJ policy meeting or discussed.

Also, what Governor Kuroda says at the press conference could push the yen higher, so the press conference is noteworthy.

For the BOJ, the timing of the announcement is not fixed. It could come as early as around 11:45 or as late as around 13:00. When there are policy changes, announcements are often delayed. If additional easing is announced, the timing may be pushed later. Pay attention to the announcement time.

3) U.S. and European Data Releases

In the U.S., there will be releases of retail sales and the CPI (Consumer Price Index). The shocking 20,000 jobs gain in last week’s employment data may be due to government shutdown effects. If this week’s retail sales and CPI are affected, there could be renewed dollar selling pressure.

In Europe, major countries will release HICP (Harmonized Index of Consumer Prices). If the results corroborate the shift to a dovish ECB and the downward revisions to the economic outlook, euro selling could accelerate.

This week also features important U.S. and European economic indicators.

◎ This Week’s Key Economic Events Schedule

March 11 (Monday)

U.S. Daylight Saving Time starts

Eurozone Finance Ministers’ Meeting

16:00 NOK Norway CPI

16:00 TRY Turkey GDP

21:30 USDRetail Sales

March 12 (Tuesday)

EU Finance Ministers’ Council

UK Parliament Brexit Amendment Vote

09:30 AUD Domestic Housing Finance; NAB Business Confidence Index

15:30 AUDDe Bellis RBA Deputy Governor Speaking

17:30 SEK Sweden CPI

18:30 GBP UK GDP, Trade Balance, MPC Minutes

21:30 USDCPI (Consumer Price Index)

March 13 (Wednesday)

02:00 USD 10-Year Bond Auction

04:00 GBPUK Parliament Brexit Bill Vote

08:30 AUD Westpac Consumer Confidence Index

17:00 EUR Spain HICP

18:00 EUR Italy Unemployment Rate

19:30 EUR Industrial Production

21:30 USD Durable Goods Orders

23:30 USD Crude Oil Inventories

March 14 (Thursday)

02:00 USD 30-Year Bond Auction

04:00 GBPUK Parliament Vote on No-Deal Brexit (Scheduled)

11:00 CNY China Industrial Production

16:00 EUR Germany HICP

16:45 EUR France HICP

17:30 SEK Sweden Unemployment Rate

20:00 USD OPEC Monthly Report

21:30 USD Import Prices

21:30 CAD New Housing Price Index

23:00 USD New Home Sales

March 15 (Friday)

04:00 GBPUK Parliament Extension Vote (Scheduled)

06:30 NZD NZ PMI

07:50 CADWilkins BOC Vice Chair Speaking

Around 12:00 JPY Bank of Japan Policy Rate Announcement

15:30 JPYKuroda BOJ Governor Press Conference

17:55 JPY Kuroda BOJ Governor Remarks (G20 Tokyo Summit Greeting)

18:00 USD IEA Monthly Report

18:00 EUR Italy HICP

19:00 EUR Eurozone CPI

21:30 USD NY Fed Manufacturing Index

23:00 USD University of Michigan Consumer Sentiment

March 16 (Saturday)

02:00 USD Baker Hughes Rig Count