Finance Minister and Central Bank Governor Teleconference: Coordinated Monetary Easing? | "March 3 Focus and Event Schedule"

Yesterday, after the Bank of Japan Governor announced liquidity provision and the largest possible purchases of FTF, and stated that the Fed and the ECB would also act appropriately, stock prices have rebounded.

However, if nothing comes out from today's scheduled conference call, or if the content does not meet what the market desires, a renewed decline in stock prices could begin.

Also, while the world is being rattled by COVID-19 (the novel coronavirus), shots have been launched from the neighboring North Korea.

Issues such as Turkey and Greece, refugee problems, and other risk factors are also emerging.

Nevertheless, COVID-19 (the novel coronavirus) is likely to remain the focus of the market today as well.

◎ Today's Points of Attention

1) Phone Conference of Finance Ministers and Central Bank Governors

Concern over global stock price declines and economic stagnation due to COVID-19 has led central banks around the world to announce that they will act appropriately (cutting rates!?).

Today (Japan time on the 4th), the heads of central banks and finance ministers of major countries are scheduled, and as described above, when they act appropriately = cut rates, it is expected that major countries will coordinate.

However, the issue and point of focus here is the reversal rate and the room for easing.

The United States, Canada, and Oceania currencies have room to ease, so coordinated rate cuts would be fine, but Japan, Switzerland, and the EU are already implementing negative interest rates and are considered to have little room to cut.

Also, there are limits to easing policy, and the side effects of easing policy are being discussed, with the reversal rate drawing attention.

For this reason, there seems to be little room for adjustment for the three currencies of yen, franc, and euro.

There is also attention on whether each central bank and finance minister will take emergency rate cuts, emergency monetary policy changes, or emergency fiscal actions.

2) RBA Board Meeting

There are various predictions about the RBA board meeting.

A 0.5% rate cut at today’s meeting

A 0.25% rate cut at today’s meeting

Hold steady at today’s meeting and coordinate rate cuts with other central banks

Hold steady at today’s meeting and monitor the situation

Rate cuts are seen as already priced in.

Therefore, if kept on hold, there may be a rise in AUD, so attention is needed, and the statement will be watched closely as well.

3) Super Tuesday

Yesterday, a young candidate, Pete Buttigieg, announced he would withdraw from the Democratic presidential primary.

Today’s Super Tuesday could determine the Democratic candidate.

Attention is on whether it will be Sanders or Biden.

Currently, President Trump is expected to be re-elected, and the attention has decreased due to COVID-19, but if the containment of this coronavirus fails, Trump’s reelection could be in jeopardy.

If that happens and the Democratic candidate is Sanders, stock prices could crash.

Attention on the Democratic candidate remains.

◎ Today's Event Schedule

Tuesday, March 3

U.S. Super Tuesday

G7 Finance Ministers and Central Bank Governors Emergency Phone Conference

09:30　AUD Current account and building permits

12:30　AUDRBA Board Meeting, Policy Rate, and Statement Release

15:45　CHF Switzerland GDP

16:00　TRY Turkey CPI (Consumer Price Index)

17:00　EUR De Guindos ECB Vice President Speech

18:30　GBPUK Construction PMI

19:00　EUR Euro area HICP (Consumer Price Index) and unemployment rate

19:00　EUR Holzmann, Austrian Central Bank Governor Speech

Wednesday, March 4

04:50　USDMester, President of the Cleveland Fed, Speech (Voting rights in 2020 and 2022)

06:45　NZD New Zealand Building Permits

08:50　USD Evans, President of the Chicago Fed, Speech (Voting rights in 2021)