Attention on post-Chinese New Year China! "Highlights for the Week of February 2 and Event Schedule"
Last weekend leaned more risk-off than expected.
I think effects from month-end flows and the like contributed, but USD/JPY fell to around 109.30 yen.
During the weekend, reports about the novel coronavirus continued, with infections spreading worldwide and deaths from the virus occurring outside of China as well.
There have been many reports about the coronavirus, and at the same time in China there are also outbreaks of avian influenza, and the previously widespread swine flu has not completely subsided.
With so much virus-related news, there is speculation that the windows may be opened at the start of the week.
Originally, January 31 to February 1 was a historic day as the UK was to leave the EU, and this topic should have drawn attention, but it has been overwhelmed by coronavirus news.
However, moving forward, headlines and statements related to the Brexit departure are expected to attract attention.
◎ Points of focus this week
1) Novel coronavirus
Infections continued to rise last week, with deaths from the novel coronavirus reported to exceed 300 and infections exceeding 14,500.
The WHO has declared an emergency, and three American airlines have canceled direct flights to China, while overseas companies in China are pausing operations and business activities.
The risk-off trend is accelerating.
This week, attention is expected to remain on the novel coronavirus.
1st point of focus: China market after the Spring Festival.
Hong Kong, which reopened ahead of schedule, is seeing sharp declines, and the Chinese market is also expected to fall sharply.
In China, there is talk that a circuit breaker may be triggered and that liquidity may be provided, and markets are expected to be volatile.
2) After the Spring Festival, Chinese people moving across the world will return home.
Attention is on whether infections among Chinese will surge at that time.
3) Enterprises, factories, and stores may resume operations and business.
In particular, since many countries with close ties to China will be affected, Chinese corporate movements could influence the world, so caution is warranted.
On the positive side, there have been unconfirmed reports that a specific antidote has been developed in the United States.
If a true antidote exists, it may eventually move toward containment.
Compared with SARS, some believe that stock prices and markets may soon stabilize.
This week too, the trend of the coronavirus seems unlikely to let up.
2) Important indicators
This week is the first week of the month, so many important indicators are scheduled.
Among them, the following indicators are especially noteworthy.
PMIs
Manufacturing and services PMIs, composite PMIs, and others from China, Europe, the UK, and the US are to be released, along with ISM and Ivey indices.
There are many factors such as Middle East risks and the novel coronavirus that could cool the business sentiment, and there is attention on whether the sentiment will bottom out and recover again.
Employment data
Employment data will be released in NZ, Canada, and the US.
The US has been showing steady employment gains, so attention is on the unemployment rate and average hourly earnings; NZ and Canada are also expected to move a lot.
Recently, Canadian employment data has moved more than US data, so trading Canada may be more interesting.
RBA policy rate
Until the end of last year, the probability of a rate cut had declined, and signs of an Australian economy rebound appeared, but there are now many negative factors for the Australian economy including bushfires, Middle East risks, and the novel coronavirus.
In this situation, attention is on whether a rate cut will occur, how the economy is viewed, and the possibility of future rate cuts.
3) Statements by important figures
This week, President Trump’s State of the Union address is scheduled.
With policy directions for this year and a presidential election, attention is on what stance will be announced.
There are other important-person statements scheduled, but the Brexit-related comments and headlines are particularly noteworthy.
Although not on the schedule, the UK is withdrawing from the EU and entering a transition period.
There will be negotiations with various countries on FTAs, and headlines or statements about negotiation terms are expected to cause big moves in the pound.
Be attentive to statements by important people and headlines.
◎ This week’s events schedule
February 3 (Monday)
09:30 AUD Building permits
10:45 CNY Caixin Manufacturing PMI
16:00 TRY Turkey CPI (Consumer Price Index)
16:30 SEK Sweden Manufacturing PMI
17:00 NOK Norway Manufacturing PMI
17:45 EUR Italy Manufacturing PMI (revised)
17:50 EUR France Manufacturing PMI (revised)
17:55 EUR Germany Manufacturing PMI (revised)
18:00 EUR Eurozone Manufacturing PMI (revised)
18:30 GBP UK Manufacturing PMI
23:45 USD US Manufacturing PMI (revised)
February 4 (Tuesday)
Trump’s State of the Union Address
00:00 USD ISM Manufacturing PMI
06:00 USD Bark Dist? Atlanta Fed president speaks
06:45 NZD Building permits
12:30 AUD RBA Policy Rate and Statement
18:30 GBP UK Construction PMI
19:00 EUR Italy HICP (CPI)
February 5 (Wednesday)
00:30 MXN Mexico Manufacturing PMI
06:45 NZD Employment increase/decrease and unemployment rate
10:30 AUD Lowe RBA Governor speaks
10:30 JPY Wakatabe, Bank of Japan Deputy Governor, speaks
10:45 CNY Caixin services PMI
16:30 SEK Sweden Services PMI
17:10 EUR Lagard, ECB Vice President speaks
17:45 EUR Italy composite & services PMI (revised)
17:50 EUR France composite & services PMI (revised)
17:55 EUR Germany composite & services PMI (revised)
18:00 EUR Eurozone composite & services PMI (revised)
18:30 GBP UK composite & services PMI
19:00 EUR Eurozone retail sales
22:15 USD ADP Employment Report
22:30 USD US trade balance
22:30 CAD Canada trade balance
23:45 USD US composite & services PMI (revised)
February 6 (Thursday)
00:00 USD ISM Non-Manufacturing PMI
00:30 USD Crude oil inventories
02:30 CAD Wilkins, BOC Deputy Governor, speaks
09:30 AUD Australia trade balance, retail sales, NAB sentiment
10:30 JPY Sekai Izumi? Bank of Japan board member speaks
17:20 EUR Lagarde ECB President speaks
23:00 EUR Villeroy? France central bank president speaks
23:15 USD Kaplan Dallas Fed President speaks (2020 voting member)
February 7 (Friday)
US presidential election: Democratic candidates’ debate
07:30 AUD Lowe RBA Governor speaks (semiannual congressional testimony)
09:30 AUD RBA Quarterly Monetary Policy Statement
Around 12:00 CNY China trade balance
16:00 EUR Germany current account & trade balance
16:00 NOK Norway GDP
16:45 EUR France current account & trade balance
17:30 GBP Halifax house price index
21:00 MXN Mexico CPI
22:30 USD NFP employment, unemployment rate, average hourly earnings
22:30 CAD Canada employment & unemployment rate
February 8 (Saturday)
Ireland general election
00:00 CAD Ivey PMI
03:00 USD Baker Hughes Rig Count
