Will the dollar buying continue this week as well? "Key points and event schedule for the week of March 23"

 

Last week the dollar strengthened, and the dollar was bought throughout the week.

The dollar index, which is used to gauge the dollar level, has reached its highest since 2002.

Risk-off behavior led to a flow of investment funds being withdrawn, cashing out, and converting to US dollars; it is believed that panic buying of dollars due to concerns about scarce dollars contributed to the rapid rise in the dollar.

 

Over the weekend there was news that Italy would nearly halt almost all industrial production.

Also, there is concern that next week may open with a gap down, and that dollar buying may continue this week.

 

 

◎ This Week’s Focus

 

1) Coronavirus

 

Last week, the market continued to be dominated by the coronavirus.

In Europe, the number of infections is rising, and many countries announced restrictions on going out, travel, entry, border closures, and states of emergency as part of their responses.

Following these announcements, stock prices fell sharply in the first half of the week, bonds were heavily sold, and cashing out led to dollar buying.

 

In the latter half of the week, central banks and governments announced support measures; the United States implemented zero-interest-rate policy along with tax relief and cash payments; Australia decided to implement QE under a low-rate policy; Europe announced additional easing measures to support the economy.

Thanks to that, stock prices remained solid toward the weekend.

 

This week, attention will likely be on responses to the spread of infections and the tug-of-war between economic-support measures.

As stock prices stabilize, autonomous rebounds are also likely to occur.

The Dow and S&P 500, and the Nikkei Average have fallen by more than about 30% from January highs.

Even in an autonomous rebound, a rise of about 15% is likely, so keep an eye on stock movements.

 

 

 

2) Manufacturing, Services, and Composite PMI

 

This week PMIs (flash readings) will be released in Germany, France, the euro area, the UK, and the US.

Given the uncertainty about the economy due to the coronavirus, market sentiment is expected to draw attention.

 

The economic sentiment in Europe and the UK, where infection impacts are still expanding, and the US, which announced a state of emergency early, will be released.

Because these are flash readings, there is often a divergence between expectations and actual results.

If the results deteriorate more than expected, there could be stock declines and a shift toward risk-off, so beware.

 

Manufacturing PMI (Consensus: 40) (Prev: 49.8)
Services PMI (Consensus: 41.5) (Prev: 52.5)
Composite PMI (Consensus: 38.0) (Prev: 52.0)

 

Manufacturing PMI (Consensus: 40.0) (Prev: 48.0)
Services PMI (Consensus: 42.5) (Prev: 52.5)
Composite PMI (Consensus: 39.1) (Prev: 50.7)

 

Manufacturing PMI (Consensus: 39.0) (Prev: 49.2)
Services PMI (Consensus: 38.4) (Prev: 52.6)
Composite PMI (Consensus: 37.8) (Prev: 51.6)

 

PMIs in European countries most affected by the outbreak are especially important to watch.

 

 

 

3) Unemployment Insurance Claims

 

This week’s US unemployment insurance claims are a hot topic.

 

Over the past few months the claims have been around 210,000, but the previous result jumped to 280,000.

However, 280,000 was a figure seen in 2016-2017 and around the start of the Trump administration.

This figure was already a topic, but this week the forecast for initial claims has surged to 2.5 million.

Whether this forecast is accurate and what the actual numbers will be is something to watch closely.

 

 

 

 

 

 

◎ This Week’s Economic Calendar

 

 

Monday, March 23

 

 

Tuesday, March 24

 

G7 Foreign Ministers’ Video Conference

 

00:00 EUR Euro-area Consumer Confidence

07:00 AUD Australian Services/Manufacturing PMI

17:15 EURFrance Manufacturing/Services/Composite PMI (Flash)

17:30 EURGermany Manufacturing/Services/Composite PMI (Flash)

18:00 EUREurozone Manufacturing/Services/Composite PMI (Flash)

18:30 GBPUK Manufacturing/Services/Composite PMI (Flash)

22:45 USDUS Manufacturing/Services/Composite PMI (Flash)

23:00 USD New Home Sales

 

 

Wednesday, March 25

 

06:45 NZD New Zealand Trade Balance

08:50 JPYMain Opinions from the Bank of Japan Policy Meeting

18:00 EUR Germany IFO Business Climate

18:30 GBPUK CPI (Consumer Price Index)

21:30 USD US Durable Goods Orders

23:30 USD Michigan Consumer Confidence Index

 

 

Thursday, March 26

 

16:00 EUR Germany GfK Consumer Confidence

18:30 GBP UK Retail Sales

20:00 TRY Turkish Central Bank Monetary Policy Meeting Minutes

21:00 GBPBOE (Bank of England) Policy Rate, Statement, MPC Vote, and Minutes

21:30 USDUS Initial Jobless Claims and GDP (Preliminary)

 

 

Friday, March 27

 

04:00 MXN Mexico Policy Rate Announcement

21:30 USD PCE Deflator

23:00 USD University of Michigan Consumer Confidence Index

 

 

Saturday, March 28

 

02:00 USD Baker Hughes Rig Count

 

 

Sunday, March 29

 

Europe Daylight Saving Time begins

 

 

 

 

 

 

 

 

 

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