In a quiet market between GW and China/Japan! “Key points and event schedule for May 1”
Yesterday, at the ECB Governing Council, it was announced that the policy rate would be kept unchanged, but by actually lowering the rate on the accommodative policies that are being used for lending, a de facto rate cut has occurred.
The much-watched press conference of President Lagarde concluded without any verbal slips and ended smoothly.
Also, the London FIX at month-end saw considerable volatility, with a rapid decline in the dollar and yen, and rises in the euro and pound.
Today is the beginning of the month, a weekend, the middle of Golden Week, and in some Asian and European countries it is a holiday (Labor Day), so a subdued market and unusual flows may emerge, leading to potentially unstable movements.
◎ Today's Points of Attention
1) ISM Manufacturing PMI
Today the U.S. ISM Manufacturing PMI will be released.
Forecasts are around 36.9, indicating a very weak figure is expected.
This is data from the lockdown period due to the coronavirus.
If it comes in well below expectations, there is a possibility of a risk-off move.
This merits close attention.
2) Sluggish Market
Today a subdued market is expected from the Tokyo to the European sessions.
The Tokyo market is not closed, but it will be thin due to the middle of Golden Week, with potential European softness.
Yesterday's London FIX moved sharply, with the pound/yen moving about 200 pips.
There are talk of month-end flows, but there are also reports of thin trading pushing in one direction.
In the uncertain market conditions caused by the pandemic, low trading volume is a risk, so I want to stay cautious.
3) Risk Factors
All eyes are on the health of North Korean Chairman Kim Jong Un.
With various reports ranging from death rumors and isolation to rumors that he is hiding to escape the virus, there is no definitive information, so attention is high; headlines could move the markets, so be careful.
Positive statements from oil-producing countries about production cuts appear to be supporting crude prices.
However, since these are just remarks, if negative statements emerge, a fresh decline could begin.
Oil markets remain unstable.
If June futures dip back into single digits, risk-off could prevail, so please be cautious.
◎ Today's Event Schedule
Friday, May 1
China, Hong Kong, Singapore, South Korea, Switzerland, France, Germany,
08:50 JPY Bank of Japan Monetary Policy Meeting Summary (for March 16)
17:30 GBP UK Manufacturing PMI
22:45 USD U.S. Manufacturing PMI
23:00 USDISM Manufacturing PMI
Saturday, May 2
02:00 USD Baker Hughes Rig Count
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