FOMC Minutes, CPI Release! "Key Points on February 19 and Event Schedule"

Yesterday, after the U.S. holiday, all eyes were on how stocks would react, but Apple’s impact was limited.

In Europe, Germany and the eurozone sentiment data were released, and the results were disappointing.

The euro has fallen, breaking a key level against the dollar.

For the time being, the euro is likely to remain range-bound on the upside.

◎ Today’s Points of Focus

1) UK CPI (Consumer Price Index)

Yesterday’s UK employment data showed decent employment, but average wages slightly fell short of expectations, yielding mixed signals.

Today’s CPI release will also have a significant influence on policy decisions.

If prices come in below expectations, the likelihood of a March rate cut rises, which could weigh on the pound.

Stay tuned for the data release.

2) Canada CPI (Consumer Price Index)

Canada saw a sharp drop in oil prices, fueling talk of possible rate cuts.

Today’s CPI will be the indicator with the most impact on policy decisions.

With crude prices holding firm, a result well above expectations could lead to a strong rally in the Canadian dollar.

3) FOMC Minutes

Release of the FOMC minutes where a hold was announced.

Attention to whether a rate cut was considered, what the economic outlook looks like, and what the policy decision points were.

Also, pay attention to the yield move in the U.S. 10-year Treasury after the minutes are released.

4) Turkish Policy Rate

Today’s Turkish policy rate is expected to be cut by 0.5%.

There was a rapid pace of cuts causing a sharp drop in the lira, but the lira decline has since stabilized.

Nevertheless, President Erdogan’s pressure to cut rates remains, and a 0.5% cut is expected this time.

If the actual cut exceeds expectations, the lira could come under heavy selling pressure.

There is a possibility of a renewed Turkish lira shock.

Watch the policy rate announcement closely.

5) COVID-19

Apple’s disclosure that sales will likely miss forecasts weighed on global stock prices.

Gold prices have risen, trading around the $1,600 level.

The impact on supply chains is larger than initially anticipated, affecting product imports/exports and leading to weaker sales and consumption.

Additionally, sentiment in Europe and elsewhere has deteriorated, reinforcing risk-off pressure.

Today, focus remains on stock prices and any risk-off headlines.

◎ Today’s Economic Event Schedule

Wednesday, February 19

U.S. Democratic presidential candidate TV debate

07:15 NZDO a RBNZ Governor testimony (Congress)

08:50 JPY Trade Balance

17:30 SEK Sweden CPI (Consumer Price Index)

18:00 EUR Euro Area Current Account

18:30 GBPUK CPI (Consumer Price Index)

20:00 TRYTurkey policy rate announcement

22:10 USD Boštick, Atlanta Fed President ( voting rights in 2021)

22:30 USDMester, Cleveland Fed President (voting rights in 2020 and 2022)

22:30 USD Building Permits

22:30 CADCanada CPI (Consumer Price Index)

Thursday, February 20

01:45 USDKashkari, Minneapolis Fed President (voting rights in 2020)

03:30 USDKaplan, Dallas Fed President(voting rights in 2020)

04:00 USDFOMC Minutes (January 29)

06:30 USD Barkin, Richmond Fed President (voting rights in 2021)