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04/18/2017 19:34
Release： 04/18/2017 19:34
Update： 04/08/2021 02:35
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Nikkei 225 index Fujitomi
Nikkei stock average extends gains; range-bound after SQ https://www.fujitomi.co.jp/?p=13630 With caution ahead of the U.S. employment report, the U.S. stock market edged higher. The S&P 500 index closed up 0.07% at 2364.87, and the Dow Jones Industrial Average rose 2.46 points (+0.01%) to 20858.19. The yield on the 10-year U.S. Treasury note rose briefly to about 2.60%, its highest in nearly three months. In spite of this, buying in financial shares supported the market. Meanwhile, U.S. crude oil futures hit a roughly three-month low, triggering selling in the oil sector and weighing on the market’s upside. NYMEX WTI futures for April finished at 49.28 dollars per barrel, down 1.00 dollar (1.99%). Domestic inventory concerns and vigilance over shale oil expansion plans bred bearish sentiment. In the U.S. FX market, the rise in U.S. interest rates led to a stronger dollar and weaker yen. By the close, the yen briefly touched around 115.00 per dollar, the lowest in about one and a half months since January 30. With expectations that the FOMC will hike rates next week on the 14th-15th, traders speculate that the pace of future rate hikes could be faster than previously anticipated. The ECB kept policy unchanged at its latest meeting. Draghi’s press conference was not as dovish as markets had expected, supporting euro-buying against major currencies. Stock index futures and options for the March contract, as the special quotation (SQ) date approaches, are expected to extend gains on the yen’s weakness. With the calendar shift for futures, from today the Nikkei 225 futures will trade below the Nikkei Stock Average by about 130 yen due to the March ex-dividend. After the SQ, with attention to the currency market, markets may become range-bound, but the dollar/yen at around 115 could allow further upside. In the U.S., the February employment data will be released. Next week, the FOMC meeting is scheduled. 【Buying factors】 ・Expectations of benefits from the Trump administration’s “growth-oriented policy” ・Expectations for Trump’s policies ・U.S. stock market modestly higher; energy shares rebound ・Dow Jones up (20858.19, +2.46) ・Nasdaq up (5838.81, +1.26) ・CME 225 futures higher than Osaka Exchange, close at 19290 (June contract) ・Fed Chair hints at March rate hike ・Forex: dollar-yen around 115.00-05 【Selling factors】 ・Oil futures further decline; U.S. WTI below 50 dollars for first time since December (49.28, -1.00) ・European stock markets slide with oil weakness ・Fear gauge VIX at 12.30, up from the previous day ・Concerns about Europe’s political situation ・Uncertainty ahead of the French presidential election ・Uncertainty over EU national elections ・North Korea geopolitical risk ・Greece debt crisis resurging 【Other points to watch】 ・Major SQ calculation date ・EU leaders’ summit (Brussels, final day) ・Dollar weakens against euro, ECB President remarks; NY market ・U.S. bonds continue to fall; yields rise on expectations of more rate hikes; focus on employment data ・COMEX gold futures fall on expectations of U.S. rate hikes and a stronger dollar ・ECB keeps policy rate at 0.00% ・ECB keeps deposit facility rate at -0.40% ・New U.S. immigration order faced another injunction in Washington state ・U.S. to hold a meeting of 68 countries on the 22-23 to accelerate IS elimination ・U.S. Treasury Secretary requests early debt ceiling increase from Congress ・U.S. Fed buys $7.8 billion in government-sponsored MBS — NY Fed ・IMF Deputy Director warns that if France exits the euro, it would face severe poverty — local paper 《Schedule》 08:50 1Q and 3Q corporate sentiment survey 09:30 January Australian housing loans 16:00 February German PPI (WPI) 16:00 January German trade balance 16:00 January German current account 16:45 January French industrial production index 18:30 January UK industrial production index Manufacturing output 18:30 January UK trade balance 22:30 February U.S. employment data 22:30 February Canadian employment data 04:00 11th February U.S. monthly treasury balance We would appreciate if you could refer to Twitter for market updates. https://twitter.com/fujitomi_8740
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[Fuji-Tomi] Nikkei average may fall again as geopolitical risks from North Korea add to concerns about European political risk

The U.S. stock market closed lower. The S&P 500 index finished down 0.29% at 2,342.19 from the previous day, and the Dow Jones Industrial Average ended at 20,523.28, down 113.64 points (0.55%). Among economic indicators, housing starts in March missed expectations, but building permits, considered a leading indicator, beat forecasts. Geopolitical risks were in focus, and Goldman Sachs’s earnings disappointment weighed on the market, contributing to a risk-off tone with a 4.7% decline. In addition, concerns about the French presidential election as voting approaches, tensions between the U.S. and North Korea, and moves toward an early UK general election heightened risk-off sentiment.

Goldman Sachs Group’s stock price fell the most since the UK voted to leave the EU. For the first quarter (Jan-Mar), bond trading revenue underperformed market expectations and lagged behind peers. Bond trading revenue was $1.69 billion, below the market estimate of $2.03 billion. According to the release, net income rose to $2.26 billion ($5.15 per share) from $1.14 billion ($2.68 per share) a year earlier, almost doubling.

NYMEX WTI futures for May settlement closed at $52.41 per barrel, down 24 cents (0.46%) from the previous day. Baker Hughes reported that domestic oil rigs rose for 13 consecutive weeks, signaling ongoing concerns about U.S. supply glut.

Today, the Nikkei average may fall on North Korea geopolitical risks and European political risk concerns. UK Prime Minister Theresa May indicated the general election would be held in June to push Brexit forward. Meanwhile, with France’s presidential election on the horizon, European political outlook remains uncertain, fueling a risk-off mood.

Yesterday, Deputy Prime Minister and Finance Minister Aso and U.S. Vice President Pence held the first economic dialogue. At the joint press conference, Pence expressed interest in a future Japan-U.S. FTA, revealing a gap with the Japanese side that wants to push TPP forward. Concerns about impacts on export-oriented companies could weigh on markets.

https://www.fujitomi.co.jp/?p=14578


[Buying factors]


- Expectations for demand support from Bank of Japan ETF purchases

- IMF raises Japan’s growth outlook to 1.2%

- IMF raises world growth forecast to 3.5%

- Cumulative NISA investments reach 10 trillion yen

- Bank of America, Merrill Lynch Q1 earnings beat expectations; investment banking and trading are strong

- U.S. Yahoo! Q1 revenue up 22%; plan to complete core business divestiture by June

- U.S. March building permits at 1,260,000 (expected 1,250,000) vs 1,213,000 previously


[Selling factors]


- U.S. equities slip, Goldman and J&J declines weigh on markets

- Dow Jones drop (20,523.28, -113.64)

- Nasdaq decline (5,849.47, -7.32)

- Goldman Sachs Q1 profit below expectations; trading revenue weak

- Johnson & Johnson Q1 sales miss; acquisitions lift full-year outlook

- U.S. March housing starts 1,215,000 (expected 1,250,000) (previously 1,288,000)

- U.S. Industrial Production Index up 0.5% in March; manufacturing unexpectedly negative

- Pound surges on UK general election ahead of schedule; dollar broadly weaker in NYFX

- USD/JPY around 108.35-108.40

- London stock market slumps as PM indicates early general election

- European stocks fall sharply on early election news

- NY crude futures slide as U.S. shale oil output reaches a two-year high (52.41, -0.24)

- CME 225 futures close down versus Osaka Exchange

- Trump administration shows policy execution uncertainty

- North Korea geopolitical risk

- Greece debt crisis re-emerges

- Uncertainty around France’s presidential election


[Other points to watch]


○ U.S.-Japan Economic Dialogue (Tokyo, final day)


- U.S. bond market: Treasury prices surge amid concerns about the French election and geopolitics

- European bonds rise; German 10-year yield falls to 0.156%

- NY gold futures extend gains, rebounding with dollar weakness

- U.S. March industrial production, MoM +0.5% (expected +0.5%) (previous +0.0%)

- U.S. March capacity utilization 76.1% (expected 76.2%; previous 75.4%)


- UK to hold general election on June 8; May says political stability needed for Brexit negotiations

- Trump to sign an executive order to tighten visa screening

- U.S.-Japan Economic Dialogue to push along three pillars; Vice President mentions potential FTA

- IMF raises 2017 global growth forecast to 3.5%; warns against protectionism

- North Korea threatens provocation with missiles; U.S. Defense Secretary comments

- Goldman Sachs retracts recommendation for long dollar; remarks by President Trump cited

- Shanghai Motor Show press days (through 20th; public days 21-28)


《Schedule》


16:00 Financial System Report (April 2017, Bank of Japan)

16:00 Number of foreign visitors to Japan (March)


15:00 European new car sales (March)

17:00 March South Africa consumer price index

17:00 Hansen Estonia Central Bank Governor lectures

18:00 February Euro area trade balance

18:00 March Euro area consumer price index (HCPI) revised

20:00 MBA mortgage applications index

20:00 Morgan Stanley Q1 results

21:00 Kraul ECB Council member lectures

23:30 Plante ECB Executive Board member lectures

23:30 EIA weekly crude stock

20th 01:00 Rosengren, President of Boston Fed, speaks

20th 03:00 U.S. Beige Book economic report release



For the latest market mood, please refer to Twitter. https://twitter.com/fujitomi_8740

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■ Important Matters and Risk Warnings Regarding Investment Products 【Financial Instruments Business Operator】
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Registration: Director-General of the Kanto Local Finance Bureau (Financial Instruments Business) No. 1960
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