Do Japan's COVID-19 countermeasure budget plan pass? Could it become "Sell The Fact"? "March 27 highlights and event schedule"
Yesterday, a 2.2 trillion dollar coronavirus stimulus package was passed by the United States Senate.
Today, it was voted on by the House of Representatives, and if passed, the bill is expected to clear this week; Treasury Secretary Mnuchin has said that cash payments to the public should arrive within about three weeks.
Reacting to this, U.S. stocks rose, and U.S. stock markets closed higher today as well.
Japan’s Bank of Japan is also purchasing 200 billion yen worth of ETFs.
However, the Nikkei Stock Average fell yesterday.
From the end of last week to the beginning of this week there were not many gaps (price gaps), but given risk factors such as the United States hitting its highest number of infections, there remains a strong possibility of gaps opening again from this weekend into next week.
We will carefully manage weekend risk.
◎ Today's Points of Focus
1) Coronavirus
The number of coronavirus infections in the United States has surpassed those in China and Italy, becoming the world's highest.
From today into the weekend, U.S. infection numbers are expected to rise.
Attention is on what measures President Trump will unveil and what measures the Governor of New York State will introduce.
Additionally, there are reports that infections are spreading in New York, to the extent that traders at the NYSE may be unable to attend, which could reduce trading volume in the stock market.
If trading volume falls, price movements may become more volatile, making risk management important.
The current market is focused on economic stagnation due to the coronavirus.
If more announcements lead to further economic stagnation, expect a shift again toward risk-off; this is something to watch closely.
2) Stock Prices
U.S. stock gains are likely in response to the Senate approving the $2 trillion coronavirus stimulus package.
Today, a vote is expected in the House, and it is anticipated to pass.
Since the market has already priced in the approval, it will be worth watching whether stock prices sell on the news or hold up after approval.
Additionally, as noted above, with the United States having the highest number of coronavirus infections and impacts spreading to the NYSE, if this situation worsens, stock prices could be affected.
If stock prices begin to fall, there is a risk of a dramatic further decline, so be cautious.
3) Dollar Strength
The Fed announced unlimited easing, and major central banks are supplying dollars, creating a plentiful dollar environment.
Within this context, real demand and corporate needs for dollars for payments and settlements appear to be decreasing.
With President Trump’s comments suggesting restraint on the dollar, a decline in dollar demand from real needs, and panic buying subsiding, a rapid dollar depreciation and a reversal could occur.
Pay attention to the level of the dollar.
◎ Today’s Economic Calendar
Friday, March 27
21:30 USD PCE Deflator
23:00 USD University of Michigan Consumer Confidence Index
Saturday, March 28
02:00 USD Baker Hughes Rig Count
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