Will the U.S.-China trade talks reach an agreement!? What about the U.S.-China summit!? ~ Highlights and event schedule for April 4 ~

Yesterday, as news of progress in the US-China trade talks leaked out, the dollar/yen jumped sharply, turning risk-on.

The risk-on sentiment led to a rally in commodity currencies, and with the RBA board adopting a dovish stance, the Australian dollar, which had fallen, was bought back and fully recovered.

In addition, the pound advanced on expectations of cooperation for Brexit after Prime Minister May met with Labour Party leader Corbyn, and discussions favored a stronger pound.

◎ Today’s Points of Attention

1) UK Parliament

In the UK Parliament, debates and votes on the Brexit deal are ongoing. Prime Minister May has also met with Labour Party leader Corbyn to seek cooperation. However, the meeting between May and Corbyn has not reached a conclusion.

Today too, it seems that nothing decisive has been reached and time is passing. There is information that at least the option of avoiding a no-deal Brexit has been approved, but to avoid a no-deal Brexit, there are basically two possibilities: either approve May’s Brexit plan, or participate in the European Parliament elections to request an extension of the long Brexit deadline. With options narrowing, all eyes are on what outcome will emerge today.

2) ECB Governing Council Minutes

This time, since the introduction of TLTRO has been decided and announced, there may be no surprises in the content.

However, I would like to focus on the background to its introduction and the outlook for the eurozone economy. Specifically, was the economy really downturn feared to the extent that such easing policy, like TLTRO, was introduced? Also, after last month’s German PMI fell sharply, the euro was sold off significantly. Was this anticipated, and what about the economic outlook is worth watching.

3) US-China Trade Talks

Yesterday, as news of progress in the US-China trade talks came out, risk-on sentiment improved. However, there is still no indication that an agreement has been reached, so a collapse remains possible. Until the very end, anything could happen. There are unresolved issues, including intellectual property rights.

On the second day of trade talks in Washington, will progress toward an agreement be made? And can they carry it to a summit? This is something to watch closely.

◎ Today’s Event Schedule

April 4 (Thursday)

06:00 USD Kashkari, President of the Minneapolis Fed, speaks

20:30 EURECB Governing Council Minutes (March 7)

23:00 CAD Ivey Purchasing Managers Index

April 5 (Friday)

02:00 USD Mester (Cleveland Fed President) and Harker (Philadelphia Fed President) speak