FOMC Statement and Powell FRB Chair’s press conference in focus! ~ Highlights and schedule on March 20 ~

Today is the 20th, a busy day with 50-day activity. There are expectations of moves related to the end of the month, end of the quarter, and fiscal year, as well as the typical data around USD/JPY and the London FIX. Also, with the FOMC scheduled, there is a high likelihood that movement may begin from today.

◎ Today's Points of Focus

1) FOMC

Today's FOMC is expected to keep rates unchanged. However, there are two main points to watch.

・Timing of rate hikes resumption

Although rate hikes have been paused, how long will the pause last? What is the reason for pausing? Understanding these will help determine when the pace of rate hikes might resume and what conditions would trigger a resume.

Regarding rate hikes, one increase is expected this year, so if no hikes occur this year, it might lean toward dollar weakness.

・Pace of balance sheet reduction

There is growing consensus that the balance sheet reduction will finish within the year. How far to shrink the balance sheet? And if it ends within the year, what will be the criteria to resume? It is a key focus.

With these two points under scrutiny, pay attention to the FOMC statement and the press conference.

2) UK Parliament

The EU Summit starts tomorrow. Prime Minister May is said to have sent a letter to EU President Tusk regarding an extension of the Brexit deadline.

In the UK Parliament, a third vote was anticipated, but it looks difficult to carry out. However, if nothing is decided and we head into the EU Summit without any extension approval, the EU is unlikely to grant an extension. Therefore, some form of achievement will likely be made before heading into the EU Summit.

Today too, pay attention to statements from UK and EU officials and headlines.

◎ Today's Event Schedule

Wednesday, March 20

08:50 JPY Bank of Japan Monetary Policy Meeting Minutes

09:00 AUD Block RBA Deputy Governor remarks

18:30 GBP CPI (Consumer Price Index)

23:30 USD Crude oil stocks

Thursday, March 21

EU Summit (Summit with Leaders)

03:00 USD FOMC rate decision and statement03:30 USD Powell press conference

06:45 NZD Quarterly GDP

09:30 AUD Employment Change and Unemployment RateEmployment Change and Unemployment Rate