Will the market regain its calm? "Attention points and event schedule for the week of April 6"

 

Last week, the coronavirus remained a factor moving the market, but I think the market is gradually getting used to it.

As always, stock prices continue to move up and down in a high-volatility environment, but it doesn’t seem to be a panic market where circuit breakers are triggered on a daily basis.

 

The VIX index, regarded as a barometer of market fear, has been gradually declining from the peak of 85 on March 16.

One milestone is said to be around 40, and we are close to dipping below that level.

Although the containment of the coronavirus is still unclear, market calm may be just around the corner.

 

Also, from this week, Oceania ends daylight saving time and enters standard time (winter time).

 

◎ This Week’s Highlights

 

1) Coronavirus

 

The number of coronavirus infections is expanding.

In Europe, including Italy and France, the pace of infection growth has slowed, but the number of infections continues to rise.

In the United States, the pace of infection growth is accelerating in a doubling fashion.

Lockdowns in cities in Italy, France, and Spain, as well as shop closures and stay-at-home orders in the United States, continue.

 

“Infections increase → city lockdowns/stay-at-home orders continue → economic stagnation continues.”

 

The economic stagnation is reflected in numbers, with Europe’s manufacturing and services PMIs at near-record lows and the United States reporting the highest ever number of initial jobless claims.

The current numbers may not be the lowest yet, and there is anxiety about how much worse it could get and how long this will last, focusing on how far and how long coronavirus impacts will spread and persist.

 

This week, I expect headlines about the coronavirus to continue driving the market.

 

 

 

2) Crude Oil Prices

 

At the end of last week, statements about production cuts from Russia and Saudi Arabia caused crude oil prices to surge.

However, a concrete production cut has not been decided yet; discussions are just starting.

An extraordinary OPEC meeting is scheduled for the 6th, and talks with non-OPEC members such as Russia will be important.

All eyes are on whether a production cut can be agreed or whether talks may break down again.

 

Even if an agreement is reached, if the cut is not substantial, demand will still be weak due to coronavirus, so prices may struggle as long as supply exceeds demand.

There is also attention on whether the cuts can reach a balance between supply and demand.

 

 

 

3) Brexit Negotiations

 

British Prime Minister Boris Johnson is infected with the coronavirus and in isolation.

In the EU, Chief Negotiator Michel Barnier for the withdrawal negotiations has reportedly contracted coronavirus in mid-last month.

Negotiations were reported to be taking place online, but since then chaos has grown in Europe and the UK to the point of lockdowns.

 

In such a situation, questions arise about how far the withdrawal negotiations are progressing.

Meanwhile, there are voices saying that the withdrawal negotiations, due by the end of this year, should be postponed.

The extension of the withdrawal negotiation deadline must be requested by June.

In the UK, since exit by year-end has been codified into law, a bill to authorize postponement of withdrawal negotiations must be enacted by Parliament before the June deadline.

If calls for a postponement of withdrawal negotiations intensify, Parliament may soon be asked to propose and debate it.

Keep an eye on whether such discussions surface in statements from key figures.

 

 

 

 

◎ This Week’s Event Schedule

 

 

April 5 (Sunday)

 

Oceania enters daylight saving time

 

 

April 6 (Monday)

 

17:30 GBP UK Construction PMI

 

 

April 7 (Tuesday)

 

10:30 AUD Australia Trade Balance

13:30 AUDRBA Board Meeting, Policy Rate, and Statement

16:30 GBP Halifax House Price Index

20:00 MXN Mexico CPI (Consumer Price Index)

23:00 CAD Ivey PMI

 

 

April 8 (Wednesday)

 

21:15 CAD Housing Starts

21:30 CAD Building Permits

23:30 USD Crude Oil Inventories

 

 

April 9 (Thursday)

 

US Bond Market Shortened Trading

 

00:00 MXN Mexico Monetary Policy Meeting Minutes

03:00 USD FOMC Minutes

10:30 AUD RBA Quarterly Financial Statement

15:00 GBP UK GDP

21:30 USDUS Initial Jobless Claims

21:30 CADCanada Employment Change and Unemployment Rate

 

 

April 10 (Friday)

 

Good Friday (Holy Friday holiday)

 

10:30 CNY China CPI (Consumer Price Index)

21:30 USDUS CPI (Consumer Price Index)

 

 

April 11 (Saturday)

 

01:30 USDMester, Cleveland Fed President, Remarks (Voting member in 2020 and 2022)

02:00 USD Baker Hughes Rig Count

03:00 USD US Monthly Budget Statement

 

 

 

 

 

 

 

 

 

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