Attention on the financial policy announcements from Japan, the United States, and Europe! "Key points and event schedule for the week of April 27"
Last week crude oil prices plummeted, recording the first ever negative price, and the market was in complete confusion.
This reverberation seems likely to continue this week as well.
Starting with Japan, monetary easing has progressed, easing money supports stock prices, and there is talk that the stock market may be distorted.
In particular, because the Bank of Japan is supporting the purchases of Japanese stocks, it is said that the real economy and stock prices are greatly diverging.
The plunge in crude oil prices this time is due to a surplus of crude oil in actual trading.
The surplus of crude oil has led to this collapse, and the surplus in crude oil is reflected in oil prices, so oil prices may be serving as a barometer for the current global economy.
From the stock market view, it seems to be stabilizing after incorporating the impact of COVID-19, but the collapse in crude oil prices, negative pricing, and the turmoil in the oil market may be reflecting the true state of the world economy.
◎ This Week’s Points of Attention
1) Monetary Policy
Bank of Japan Monetary Policy Meeting
This BoJ monetary policy meeting will be announced as a one-day event, tightened from a two-day schedule.
What is anticipated is further ease, possibly an expansion in both the quantity and quality of quantitative easing.
It is said that the purchases may expand from government bonds and ETFs to corporate bonds and CP (Commercial Paper), with a target of 80 trillion yen annually for government bond purchases, but there is speculation that the expansion may be unlimited.
However, last year and the year before, the 80 trillion yen annual target for government bond purchases was not fully used up and ended without being completed.
Even if the unused portion of government bond purchases were made unlimited, it is believed that it would ultimately not be used up.
Therefore, attention is not only on expansion but also on how to use it (changes to YCC, etc.).
FOMC
In this FOMC, a hold is expected, but there is talk that the U.S., Japan, and Europe may be aligning their approaches.
If they do align, questions arise about whether the Fed will introduce negative rates, consider negative rates, or what other measures such as ETF purchases are being considered, drawing attention to what will be examined going forward.
ECB Governing Council
While the easing policy is of interest, there is little expectation due to the inability to reach agreement on corona bonds and joint bonds at the summit.
More importantly, the press conference by ECB President Lagarde is of interest.
In previous press conferences, there were remarks deemed inappropriate toward Italy.
What she will say at this press conference is something to watch closely.
Additionally, Europe is gradually moving toward regulatory easing.
The timing of easing is not clear, but economic outlooks are likely to be released.
I would like to pay attention to economic outlooks as well.
2) Crude Oil Price
The oil market is unstable, with inventories rising, so attention will likely remain on oil prices this week.
In particular, attention is on oil inventories, remarks by key figures, and price differences by contract months.
Weekly crude oil inventories released every Wednesday remain high.
It is important to see whether these inventories will decrease or increase.
Also, there is no longer space to store crude oil, and storage costs are rising.
Storage in Cushing, the current storage location, is also noteworthy.
One contributing factor to rising storage costs is the price spread between different crude oil futures contract months.
If this price spread widens, the oil market is likely to become unsettled again, so paying attention to the price spread is advisable.
Also, a production cut meeting is said to be on May 10, but there are two weeks left, so statements from oil-producing country leaders may emerge beforehand.
Additionally, regarding statements for the production cuts, and whether leaders are positive or negative toward cuts, attention is on the statements from various countries.
3) Economic Indicators
Aside from policy rates, other indicators to watch are listed below.
US GDP
First estimate for Q1 will be released.
The United States imposed some lockdowns in the latter part, but the GDP includes February when rumors of the coronavirus started globally.
Because this is a first estimate, there is a high possibility of a deviation between forecast and actual figures, so it is essential to watch closely.
US Initial Jobless Claims
Initial jobless claims, released weekly, remain high.
This week, it is important to see whether claims continue to rise or begin to fall.
ISM Manufacturing Index
This index measures the outlook for the manufacturing sector and whether people in manufacturing expect the economy to improve or weaken.
Forecasts are worse than last month.
Watch whether it falls short of expectations.
◎ This Week’s Event Schedule
April 27 (Monday)
Around 12:00 JPYBoJ Monetary Policy Meeting - Statement
15:30 JPYKuroda, BoJ Governor, Press Conference
07:45 NZD Employment Change/Unemployment Rate
10:30 AUDAustralia CPI
21:30 USDU.S. GDP
23:30 USDCrude Oil Inventories
03:00 USDFOMC Policy Rate and Statement
03:30 USDPowell, Fed Chair, Press Conference
20:45 EURECB Governing Council Policy Rate and Statement
21:30 EURLagarde ECB President Press Conference
21:30 EURU.S. Initial Jobless Claims・PCE Deflator
21:30 CADCanada GDP
23:00 USDISM Manufacturing Index
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