Dow Jones averages fall for the third day in a row! What about the fourth day? "February 27 Highlights and Event Schedule"
The spread of COVID-19 (novel coronavirus) continues, and global stock prices are falling further.
The Dow average briefly moved into positive territory, but ultimately fell into negative territory, marking a three-day decline of about 2,000 dollars.
All eyes are on how much public funds can support the Nikkei, which has beenEntering capital.
Today as well, stock prices and the coronavirus seem set to move the market.
◎ Today's Points of Focus
1) Risk-off
Today, following yesterday, attention is focused on the impact of COVID-19 (novel coronavirus) and its effect on stock prices.
With COVID-19 spreading, many countries are imposing travel restrictions and issuing cautions.
The United States has raised travel restrictions to Iran.
Iran, already under economic sanctions, appears to be opposing the travel restrictions.
COVID-19 is being used politically, and there is a sense it could become a new spark for trouble.
In Italy, infections have spread to Greece, and there is a possibility of spreading across Europe.
In such a situation, we will be watching where the stock market bottoms out, at what stage risk-off is priced in, and how bad news moves stocks and currencies.
2) Germany
Yesterday, the German Finance Minister spoke about fiscal stimulus.
From the perspective of ECB President Lagarde, other ECB officials and EU officials who have urged Germany to enact fiscal stimulus, the German Finance Minister’s remarks drew immediate reactions.
There was an expectation that Germany might implement fiscal stimulus, which fueled the euro, but once it became clear that parliamentary approval would not be forthcoming, the euro stalled.
In the euro zone, with monetary policy struggling to lift the economy, expectations have shifted toward fiscal action as policy tools become constrained.
Given that many countries are fiscally strained, Germany still has room for fiscal action, so expectations are centered on Germany.
Whether Germany enacts fiscal stimulus or not is expected to heavily influence the euro going forward.
Attention is on the German parliament’s developments.
Also today, many European leaders are scheduled to speak.
We are watching for any remarks on fiscal stimulus, Germany, and monetary policy.
3) US GDP
The dollar has stopped rising and is starting to fall.
We are watching whether today’s GDP release will sustain a dollar rally or push the dollar lower.
◎ Today’s Economic Event Schedule
February 27 (Thursday)
08:30 USD Trump’s State of the Union address (on coronavirus)
09:00 NZD NBNZ Business Confidence
10:30 JPY Kanda Ozaki? Bank of Japan Governor nominee remarks
14:00 JPY Amamiya’s remarks (BoJ Deputy Governor)
18:30 EUR Panetta ECB Executive Board member remarks
18:45 EUR Lagarde ECB President remarks
19:00 EUR Eurozone Consumer Confidence Index
19:05 EUR Schnabel ECB Executive Board member remarks
19:30 GBP Canniffe? BoE Deputy Governor remarks
21:15 EUR Lane ECB Executive Board member remarks
22:30 CAD Canada Current Account
22:30 USD US GDP and Durable Goods Orders
February 28 (Friday)
00:00 USD US Existing Home Sales Pending
00:00 MXN Mexican Monetary Policy Minutes
01:00 EUR Degontes? ECB Vice President remarks
01:30 USD Evans Chicago Fed President remarks (2021 voting member)
03:00 USD U.S. 7-year Note Auction
05:30 USD Mester Cleveland Fed President remarks (2020, 2022 voting members)
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