【Fujitomi】Tokyo Stock Market: Afghan airstrike and the 105th anniversary of Chairman Kim Il-sung's birth may restrain upside.

The U.S. stock market fell for the third straight day. The S&P 500 Index closed down 0.68% at 2328.95, and the Dow Jones Industrial Average finished 138.61 points (0.67%) lower at 20453.25. Reports that the U.S. military dropped the strongest non-nuclear bomb on an IS base in Afghanistan heightened concerns about geopolitical tensions in the Middle East and with North Korea. Financial stocks began higher but faded toward the close. Both JPMorgan Chase and Citigroup posted quarterly results that beat expectations, yet declined about 1.2% and 0.8%, respectively.

NYMEX WTI crude oil futures for May settled up 7 cents (0.13%) at $53.18 per barrel. The IEA, in its monthly report, noted that the oil market, still oversupplied, is “moving toward balance,” and attributed this mainly to steady compliance with production cuts by OPEC and non-OPEC members, which was well received.

Today’s Nikkei average is likely to face resistance despite the yen’s strength easing, ahead of the 105th anniversary of Chairman Kim Il-sung’s birth tomorrow. Domestically, tensions on the North Korea front remain elevated. Amid repeated missile launch prospects, the Trump administration has taken a tougher stance, and in Korea there are still rumors of an airstrike around April 27, 2017, causing heightened alarm.

Attention is on today’s trilateral meeting of foreign ministers of Russia, Syria, and Iran being held in Moscow.

At today’s opening, there will be SQ trading related to the settlement of April options. The U.S. market is closed for Easter, and trading in the afternoon is expected to be range-bound.

https://www.fujitomi.co.jp/?p=14462

【Positive factors】

・Expectations for supply-demand support from BOJ ETF purchases

・NY crude oil futures—rebound as supply-demand improves (53.18, +0.07)

・University of Michigan consumer sentiment, current conditions index at its highest since 2000

・U.S. April University of Michigan consumer sentiment index—flash 98.0 (consensus 96.5) (previous 96.9)

・U.S. initial jobless claims 234,000 (consensus 245,000) (previous 234,000)

・JPMorgan Chase 1Q earnings beat expectations, up 17% with strong trading

【Negative factors】

・U.S. military drops the largest non-nuclear bomb on Afghanistan

・U.S. stocks fall for the third day amid geopolitical risk and selling in financials

・Dow Jones: -138.61 at 20,453.25

・European stock markets: mild declines with financials and energy weighed down

・London equities fall as financials and energy stocks come under selling pressure

・New York currencies—risk-off due to IS attack in Afghanistan

・VIX fear index at 16.02, up from the previous day

・CME 225 futures down versus Osaka Exchange (18,355, -45)

・Trump administration lacks clarity in policy management

・North Korea geopolitical risk

・Greece debt crisis resurging

・Uncertainty ahead of the French presidential election

【Other notable points】

・Good Friday holiday: Australia, New Zealand, Hong Kong, Singapore, Germany, Switzerland, South Africa, UK, and U.S. (foreign exchange market only) closed; Canada also closed

・Trilateral foreign ministers’ meeting of Russia, Syria, and Iran in Moscow

・U.S. Treasury to release exchange-rate report

・U.S. bond market—yields at multi-month lows on geopolitical risk and Trump remarks

・NY gold futures—rise as risk aversion increases amid U.S.-Afghan actions

・European bonds—continued gains as investors seek risk-off amid geopolitical factors and stock declines

・U.S. military drops the strongest non-nuclear bomb against IS in Afghanistan, first time in combat

・U.S. to again request IMF to strengthen monitoring of exchange policy, according to a Treasury official

・North Korea issue to be addressed going forward; Xi Jinping's extraordinary efforts noted by Trump

・Trump: “U.S.-Russia relations will improve,” expecting ongoing peace

・President Trump

“Firm belief that China will handle North Korea appropriately”

“If they cannot respond, the U.S. and its allies will respond”

“U.S.-Russia relations will proceed smoothly”

《Schedule》

13:30—February industrial production, final figures

21:30—March U.S. CPI

Core index excluding energy and food

21:30—March U.S. retail sales

23:00—February U.S. corporate inventories

16th—National referendum on strengthening the presidential powers in Turkey

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