Stock-price plunge equivalent to the Lehman Shock! "Attention points and event schedule on March 13"

Yesterday, President Trump's speech announced a ban on travel from Europe to the United States.

In addition, at the ECB Council meeting, the expected rate cut was not implemented, and major countries failed to coordinate a synchronized cut.

During a press conference, ECB President Lagarde made a remark that could be interpreted as abandoning Italy, and as a result Italian bonds and stock prices were sold off.

Furthermore, President Trump indicated that postponing the Tokyo Olympics by one year would be preferable.

In a situation where a pandemic declaration has been issued, if a decision to postpone the event is made, Japan's stock market could fall further, which is worrying.

◎ Today's Highlights

1) Global stock price declines

Yesterday, stock prices in Europe and the United States fell sharply, and stock prices worldwide, led by the Dow Jones, fell by more than 10% across many countries.

Italy, which was abandoned by Lagarde, ECB President, fell by 16.6%.

Nikkei futures were at 16,800 yen, down more than 1,500 yen from the previous day.

This trend is expected to connect to the Tokyo market, and it is noteworthy whether a stock price crash will occur in Tokyo as well.

Additionally, along with the stock market decline, a yen depreciation has begun since yesterday.

There is still attention on whether further Japanese selling and yen-weakness will occur with stock declines.

Moreover, there is attention on whether the travel ban from Europe, which sparked this global stock decline, will be rescinded; even if not rescinded, whether any policy that supports stock prices will emerge.

Conversely, if travel restrictions or border controls spread globally or if no effective policy emerges, further declines in stock prices are likely.

2) Default and financial risk

There have been reports that Lebanon defaulted recently.

In the bond market, bonds from highly creditworthy countries like Germany, the United States, and Japan are being bought, but PIIGS bonds such as Spain and Greece, which had been purchased recently, are being sold.

Only those with very high creditworthiness are attracting funds, while funds are being withdrawn from others.

Reuters and others report that repayment of Deutsche Bank bonds may be postponed.

Other banks are also expected to follow, and there is concern about the impact on holders of corporate bonds if bond repayments are not made.

There are rumors that some Japanese regional banks hold such bonds.

◎ Today's Event Schedule

Friday, March 13

16:00 EUR Germany HICP (Consumer Price Index)

16:45 EUR France HICP (Consumer Price Index)

17:00 EUR Spain HICP (Consumer Price Index)

23:00 USD University of Michigan Consumer Confidence Index

Saturday, March 14

02:00 USD Baker Hughes Rig Count

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