Attention-grabbing EU summit held! What will happen to the UK!? ~ Points of interest and schedule on March 21 ~

Yesterday, the FOMC was held and monetary policy was announced. The policy rate was kept unchanged, balance sheet reduction is scheduled to end in September, and there was a one-time rate hike outlook only through next year. GDP forecasts were revised downward, signaling a strongly dovish stance.

Because the statement and the press conference were dovish, the U.S. dollar continued to be sold. The USD/JPY dropped about 100 pips. Despite the dovish and easing stance, stock prices closed lower. The U.S. 10-year Treasury yield fell significantly. The U.S.-Japan yield spread narrowed.

I am curious how this flow will be digested by the Tokyo and European markets.

◎ Today’s Focus

1) EU Summit

From the statements up to yesterday, extending the Brexit deadline seems difficult.

UK Focus

・How will the Brexit bill be voted on?

・Will they push for renegotiation again?

・What is the extension period for the deadline?

・Second referendum?

・What about Prime Minister May’s position?

EU Focus

・Extension period for the deadline?

・Whether extension of the deadline is possible

・Whether renegotiation is possible

・Impact on the European Parliament elections

・What conditions to place on the UK?

・How many countries will oppose?

Today and tomorrow, attention will be on whether the Brexit deadline will be extended at the EU Summit. There have been statements from various leaders yesterday as well, but it seemed many were against extending it. I will keep an eye on the headlines.

※ Please see yesterday’s statements below

March 20th, Records Room – Stocks, Rates, and Key Officials’ Remarks –

2) Policy Rate Announcement

Today, policy rates will be announced in Switzerland, Norway, and the United Kingdom. A rate hike is expected in Norway. Switzerland and the UK are expected to hold. I will watch closely for each country’s future monetary policy outlook.

◎ Today’s Event Schedule

March 21 (Thursday)

EU Summit (Summit)

09:30　AUDChange in employed persons and unemployment rate

17:30　CHFSwiss policy rate announcement

18:00　CHFSNB press conference

18:00　NOKNorwegian policy rate announcement

18:00　EUR　European Monthly Report

18:30　GBPRetail sales

21:00　GBPPolicy rate, QE amount, and MPC vote distribution

21:30　USD　Philadelphia Fed Manufacturing Index

March 22 (Friday)

08:30　JPY　CPI (Consumer Price Index)