Focus on GDP for Jan–Mar and the FOMC and NY markets! “Key points and event schedule for April 29”

Yesterday the USD/JPY finally broke out of the narrow range and fell to the 106 yen area.

The dollar weakened in European markets, but this trend did not continue and trading in New York was subdued.

With the FOMC and ECB meeting tomorrow, a wait-and-see stance is believed to have strengthened.

Today the Tokyo market is closed, so the subdued market is expected to continue into European and American sessions.

◎ Today’s Points of Attention

1) FOMC

Today’s FOMC is focused on whether additional easing measures will be announced.

With unemployment worsening and GDP shrinking due to the coronavirus, a recession is expected, and the Fed is implementing easing measures one after another.

Zero interest-rate policy and large-scale quantitative easing have expanded to include purchases of CP (commercial paper) and junk bonds.

There are rumors that negative interest rates might also be introduced next.

Today, attention is on whether there will be additional easing, whether additional easing or negative rates are being considered, and what the policy outlook will be going forward.

Attention is on the statement and the press conference.

2) US GDP

Today's release is the preliminary GDP for January–March quarter.

Forecasts are mixed, with negative growth viewed as certain, and some estimates show double-digit declines; attention is on how far the negative figure will widen.

This GDP is for January to March.

China lockdowns began in mid-January, then spread to Asia including Japan in February, with infections expanding worldwide to Europe and elsewhere, and by the end of March the center of infection had shifted from Europe to the United States.

The coronavirus became seriously problematic around mid-February, and direct impact on the US began around March; the GDP data being reported reflects only about half of the period affected by the coronavirus.

The next quarter (April–June) is expected to show more negative growth than this, so attention is on how badly this GDP will deteriorate.

◎ Today’s Economic Event Schedule

April 29 (Wednesday)

Showa Day (Tokyo market closed)

10:30 AUDUS CPI (Consumer Price Index)

18:00 EUR Eurozone Consumer Confidence Index

21:00 EUR German HICP (Harmonized Index of Consumer Prices)

21:30 USDUS GDP

23:00 USD Existing Home Sales Pending

23:30 USDCrude Oil Inventories

April 30 (Thursday)

03:00 USDFOMC Policy Rate and Statement Release

03:30 USDPowell, Fed Chair, Press Conference

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