Liquidity declines during Easter holidays! "Key points and event schedule for April 10"

Yesterday, the dollar weakened due to the Fed's 2.3 trillion yen supply program and other measures.

At the highly anticipated OPEC+ emergency meeting, they agreed to cut production by 10 million barrels per day.

However, since the expected cut was 20 million barrels, the oil price fell to the 22-dollar range as the news of a 10 million-barrel cut disappointed investors.

The risk-off sentiment continued to fade, and the Australian and other Oceania currencies rose steadily.

Today, with many countries entering Easter holidays, market watchers are watching to see whether the risk-off retreat will continue.

◎ Today's Highlights

1) Oil Prices

At yesterday's OPEC+ emergency meeting, they apparently agreed to cut by 10 million barrels per day.

Although Russia, Saudi Arabia, and others agreed to cuts, the expected amount of 20 million barrels led to disappointment, causing oil prices to plummet.

Furthermore, the production cuts are slated to gradually reduce from 10 million barrels per day to 6 million barrels per day by April 2020.

Today, a G20 energy ministers emergency meeting including the United States and others will be held.

Saudi Arabia conditioned its agreement to cuts on U.S. participation; it remains to be seen whether the U.S. will join in the cuts at today’s G20 meeting, and whether yesterday’s agreement would hold if the U.S. does not participate.

2) Dollar Supply and Demand

Dollar demand is rising due to risk-off sentiment, pushing the dollar higher.

In response, the Fed has been coordinating dollar supply with other central banks and implementing unlimited quantitative easing policies.

Yesterday, it decided to supply an additional $2.3 trillion, including purchases of lower-rated junk bonds and high-yield bonds, an unprecedented move.

As a result, increasing dollar supply is seen as a factor driving the dollar lower.

If the impact of the coronavirus subsides, dollar demand may decrease, and further dollar depreciation could occur as the Fed and others expand dollar supply.

Attention should be paid to statements on the dollar supply-demand situation.

Today, comments from Fed Vice-Chair de Blasio (Quarles) are also scheduled, so stay tuned.

3) Easter Holiday

Today (and some parts yesterday) marks the start of Easter holidays in Europe and the United States.

Due to coronavirus restrictions and lockdowns, people’s movements are unlikely to change much during the holidays.

However, markets are experiencing lower liquidity, increasing the risk of sudden moves and flash crashes.

Moreover, with headline items such as the G20 energy ministers emergency meeting and other coronavirus-related budgets, deteriorating economic indicators could trigger sharp moves.

To prepare for sudden changes, I would like to carefully manage position size and risk.

◎ Today's Economic Calendar

Friday, April 10

Good Friday (holiday for Holy Friday)

G20 Energy Ministers Emergency Meeting (video conference)

21:30　USDU.S. CPI (Consumer Price Index)

01:30　USDMester (Cleveland Fed) President remarks (Voting rights in 2020 and 2022)

02:30　USDQuarles (Federal Reserve Vice Chair) Remarks

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