【Fujitomi】Nikkei 225 futures start with selling pressure

The U.S. stock market recovered. The S&P 500 Index rose 0.83% from the previous day, closing at 2385.26, its first large gain in two weeks, and the Dow Jones Industrial Average rose 112.73 points (0.54%) to end at 20,950.10. The FOMC delivered a 0.25% rate hike as expected, with buying dominance. There were no changes to the outlook for further hikes (two more this year), and concerns about a hawkish shift amid inflation and the labor market gave way to a sense of reassurance in the U.S. stock market. In Chair Yellen's press conference, there were no changes to the economic outlook or monetary policy, reaffirming a gradual pace of rate hikes. Ahead of the session, February CPI (core) came in as expected, and February retail sales also rose modestly as expected. The energy sector was buoyed by a crude oil futures rally for the first time in over a week, supporting the overall index rise.

NYMEX WTI futures for the April contract finished 1.14 dollars higher, at 48.86 dollars per barrel, up 2.39% from the prior day. The Energy Information Administration’s weekly report showed a draw in crude inventories, marking an eight-session rebound.

OSE All-Japan Nikkei futures for June, night session, closed 80 yen lower at 19,370. The Nikkei 225 started with losses due to the higher yen, but with expectations that the ruling party would remain the largest party in the Dutch House of Representatives election on the 15th, concerns about the Netherlands easing and potential yen appreciation driven by those concerns may ease, potentially attracting buyers. A wait-and-see mood may continue until Yellen’s speech at Jackson Hole later this week. By noon, the Bank of Japan’s policy meeting results are expected, with many expecting no surprises.

In terms of initial public offerings, Ururu (3979) will be listed on the Tokyo Stock Exchange Mothers market, and Muchacha (3560) will debut on the Tokyo Stock Exchange Jasdaq market.

【Bulls】

- Policy expectations for President Trump

- Support from BOJ ETF purchases

- U.S. stock market rebound; favorable view on three-rate-hike outlook for 2017 from FOMC

- Dow Jones up (20,950.10, +112.73)

- U.S. February CPI (m/m) +0.1% [consensus +0.0%] (previous +0.6%)

- U.S. February NY Fed Manufacturing Index +16.4 [consensus +15.0] (previous +18.7)

- VIX fear index at 11.63, down from previous day

- European stock markets slightly higher; oil up, continued stock strength expected

- Dutch House of Representatives election: far-right not the largest party; ruling party likely to win

- NY crude oil futures rebound: driven by policy support in the U.S. rather than stockpiles (48.86, +1.14)

【Bears】

- USD/JPY hints of no dollar strengthening as U.S. rate hikes do not accelerate; around 113.40-113.45 yen per dollar

- CME225 futures down vs Osaka, 19,365, -85

- Concerns about Europe’s political landscape

- Uncertainty ahead of the French presidential election

- Uncertainty about EU national elections

- North Korea geopolitical risk

- Greece, risk of debt crisis flaring again

【Other Points】

- Bank of Japan policy meeting

- Bank of England MPC, second day, policy rate decision after meeting

- Bank Indonesia to announce policy rate

- U.S. Budgetary Plan (Budget Blueprint)

- U.S. Bond market continues to extend; no signal of faster rate hikes

- Gold futures in New York continued to fall; after-hours and time-of-day surged

- U.S. February CPI and core CPI (m/m) +0.2% [consensus +0.2%] (previous +0.3%)

- U.S. February Retail Sales (m/m) +0.1% [consensus +0.1%] (previous +0.4%)

- U.S. February Retail Sales ex Autos (m/m) +0.2% [consensus +0.2%] (previous +0.8%)

- Moody’s raises Brazil’s outlook from Negative to Stable

- FOMC results

- Target range raised by 25bp to 0.75-1.00%

- “Inflation near target”

- “Balance sheet reinvestment policy maintained”

FOMC Forecast

- “Rate hikes in 2017 to occur two more times (three in total including December)”

- U.S. Energy Information Administration (EIA) weekly petroleum status report as of 2017/3/10

Crude oil -237,000 barrels (week prior +8,209,000 barrels)

Gasoline -3,055,000 barrels (week prior -6,555,000 barrels)

Distillates (including heating oil) -4,229,000 barrels (week prior -2,676,000 barrels)

Cushing, Oklahoma, crude oil inventories for delivery point

+21,300,000 barrels (week prior +867,000 barrels)

- U.S. Budget Blueprint includes up to 31% cuts to the State Department, according to congressional sources

- Ten consecutive months of U.S. net bond outflow in January

- ECB: normalization still early; situation improving, says Knot, managing director

- February foreign visitors to Japan up 7.6% year on year

- Toshiba: investment from Innovation Network approaching

- Ururu to list on Tokyo Mothers market (IPO price: 3,000 yen)

- Hobonichi to list on Tokyo Jasdaq market (IPO price: 2,350 yen)

《Schedule》

08:50　Flow of foreign and domestic securities transactions (weekly report basis)

TBD　BOJ Policy Meeting (ends with decision announced; expected to hold the policy rate at 0.10% negative)

15:30　Kuroda Haruhiko, BOJ Governor, regular press conference

06:45　Q4-NZ domestic product

09:30　February Australia employment statistics

16:00　February Europe car sales

17:30　Swiss National Bank (SNB) policy rate announcement

18:00　Norway central bank policy rate announcement

19:00　February Eurozone HICP (revised) inflation

19:00　Visco, Italian central bank president, speech

20:00　Turkish central bank policy rate announcement

21:00　BoE MPC second day, policy rate decision

21:00　MPC minutes

21:30　January Canadian securities investment

21:30　February U.S. housing starts

Building permits

21:30　Initial jobless claims for the previous week in the U.S.

21:30　March Philadelphia Fed manufacturing index

03:00 17th, Plott, ECB executive board member, speech

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