Attention to Powell's semiannual congressional testimony as FRB Chair! "Key Points and Event Schedule for the Week of February 10"
Last week, due to the impact of the novel coronavirus, risk-off markets reversed, stock prices rose, and the cross yen and cross franc currencies were sold off.
Although risk rekindled slightly on Friday, the risk-off due to the novel coronavirus is gradually calming down.
However, since the novel coronavirus itself has not settled, if information emerges that the impact will be prolonged or if the economic impact from the spread of infections widens, risk-off may flare up again.
In addition, attention is also focused on the developments of the United Kingdom, which has left the EU.
There is attention on whether the UK-EU FTA negotiations will go smoothly, and for now the negotiations have not been concluded, raising concerns that the UK may leave at the end of this year, continuing to put pressure on the pound.
◎ This Week’s Points of Attention
1) Novel Coronavirus
The novel coronavirus is still expanding in terms of affected regions and number of infections.
The expansion of infections has been priced in for a while, but it is again drawing attention as a risk factor.
In China, many companies are facing supply issues due to uncertainty about factory resumption, or are downgrading earnings outlooks because Chinese factories cannot resume.
Last week, even though stock prices had recovered, they ended with a slight decline on Friday.
This week too, stock market conditions are expected to influence the foreign exchange market, so attention will be on stock market trends.
2) Powell, Chair of the U.S. Federal Reserve, Congressional Testimony
This week, Chairman Powell’s semiannual congressional testimony is scheduled.
The five points of focus are as follows.
Impact of the novel coronavirus
There is focus on how much the economic situation and the outlook for the economy will be revised downward due to the impact of the novel coronavirus, and how the Fed views the outlook.
Fed rate-cut expectations
In the recent FOMC, rates were held steady with expectations of holding through the year, but in the interest rate markets there is movement pricing in one rate cut this year.
We are watching whether Chairman Powell will touch on this topic in the congressional testimony.
Hidden QE
Since the rapid rise in short-term interest rates last autumn, liquidity has been continued, and the market calls this hidden QE.
With the Fed's balance sheet expanding back toward pre-tightening levels after the 2017- started tightening, attention is on how long this liquidity provision will continue and its impact.
We are watching how this will be handled and its implications.
Economic outlook
Based on the above, we are focusing on how the economy and outlook are viewed, what points the Fed is watching, and what guidelines they are using.
Presidential election
It is not clear whether it will be touched upon, but there is attention on whether any remarks will be made about the presidential election.
3) Other Economic Indicators and Key Speaker Remarks
As below, a number of important indicators and speeches by key figures are planned for this week.
This week many important indicators and remarks by notable persons are expected, and there is attention that some could mark a trend reversal.
Among them, RBNZ policy rate announcement is particularly watched.
The RBA was on hold, and its stance on cutting rates further was cautious unless risks and benefits necessitated it.
We are watching how New Zealand, which shares geopolitical similarities, will decide and what the statement and press conference will reveal.
Additionally, beyond Powell’s congressional testimony, many remarks from central bank presidents and other officials are planned. We are watching closely to confirm each central bank’s stance through these comments.
◎ This Week’s Event Schedule
February 10 (Monday)
10:30 CNY Chinese CPI (Consumer Price Index)
16:00 NOK Norway CPI (Consumer Price Index)
16:30 CHF Swiss CPI (Consumer Price Index)
22:15 USD Bownan (Bowman) Fed Board Member speech
22:15 CAD Housing Starts
22:30 CAD Building Permits
February 11 (Tuesday)
Presidential primary (New Hampshire)
03:45 USD Daily San Francisco Fed President speech (2021 voting)
05:15 USD Haasler (Harker) Philadelphia Fed President speech (2020 voting)
09:30 AUD NAB Business Confidence and Home Loans
14:00 SEK Sweden Unemployment
18:30 GBP UK GDP23:00 EUR Lagarde ECB President speech
February 12 (Wednesday)
00:00 USD Powell Fed Chairman speech (semiannual Senate testimony)
02:00 GBP Haskeel external Bank of England Director speech02:15 USD Quarles Fed Vice Chair speech
03:30 USD Bullard St. Louis Fed President speech (2022 voting)
04:15 USD Kashkari Minneapolis Fed President speech (2020 voting)
08:30 AUD Westpac Consumer Confidence
10:00 NZD RBNZ Policy Rate and Statement
11:00 NZD Orr RBNZ Governor press conference
17:30 SEK Sweden Policy Rate Announcement
22:30 USD Haasler Philadelphia Fed President speech (2020 voting)
February 13 (Thursday)
00:00 USD Powell Fed Chairman speech (semiannual Senate testimony)
00:30 USD Crude oil inventories
04:00 USD Monthly Budget Statement
04:10 NZD Orr RBNZ Governor speech
09:15 CAD Poloz Bank of Canada President speech09:15 AUD Lowe RBA Governor speech
16:00 TRY Turkey Retail Trade
16:00 EUR Germany HICP (Consumer Price Index)
17:30 EUR DeCos Spain Central Bank President speech
22:30 USD CPI (Consumer Price Index)
February 14 (Friday)
04:00 MXN Mexico Policy Rate Announcement
06:30 NZD NZ Manufacturing PMI
16:00 EUR Germany GDP
17:00 EUR Spain HICP (Consumer Price Index)
19:00 EUR Euro Area GDP
19:00 JPY Amamiya Deputy Governor of the Bank of Japan speech
22:30 USD US retail sales
23:15 USD US industrial production
February 15 (Saturday)
00:00 USD University of Michigan Consumer Confidence Index
01:45 USD Mester, Cleveland Fed President speech (2020 and 2022 voting)
03:00 USD Baker Hughes Rig Count
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