Attention on risk-off in the euro area, the US-China etc.! "Key points on May 7 and the event schedule"

Today the Tokyo market will come back from the Golden Week holidays.

Attention on Japanese stocks after GW and the moves in cross-yen.

Also watching whether the Bank of Japan will step in with buying.

In emerging market currencies, the Turkish lira continues to fall.

It isn’t a sharp drop all at once, but a slow, steady decline.

It has finally fallen below 15 yen, down to 14.7 yen.

Will it keep slipping slowly, or will there be a sudden drop somewhere, a rebound, or a rise? We’re watching closely.

◎ Today's Points of Attention

1) Euro Area

The German Constitutional Court ruled that some of the ECB's easing policies were unconstitutional, sending the euro lower, but yesterday Italy made comments defending ECB policy.

In response, the euro’s reaction was limited, but after the release of growth data showing a negative 7.7%, euro selling intensified.

Watch for statements from officials about the clash between Germany and the ECB over accommodative policy and the euro area’s economic outlook.

2) U.S.-China Relations

Yesterday, President Trump again criticized China.

In response, China argues that tariffs should not be used as a weapon.

We’re seeing exchanges reminiscent of last year’s U.S.–China tensions.

Will the trade war resurface, or will the sides drift apart and end it? It’s a point of focus.

Be mindful of both sides’ statements and headlines.

3) Super Thursday

The UK monetary policy release today is a highly anticipated event, with the quarterly Inflation Report released simultaneously.

Markets expect no change in monetary policy.

What to watch is the Inflation Report, which will address how the economy, inflation, and growth projections have been affected by COVID-19, and what the statement says about future policy.

◎ Today's Event Schedule

May 7 (Thursday)

10:30 AUD Australia Trade Balance

10:45 CNY Caixin Services PMI

15:00 GBPUK BOE Monetary Policy Summary, MPC Vote Allocation, Inflation Report Release

18:00 GBPBailey Bank of England Governor Press Conference

20:00 MXN Mexico CPI (Consumer Price Index)

21:30 USD US Initial Jobless Claims

21:30 USD Founder/President of Atlanta Fed, Bostic, Speech

23:00 CAD Ivey PMI

May 8 (Friday)

01:00 USD Kashkari, Minneapolis Fed President Speech

05:00 USD Harker, Philadelphia Fed President Speech

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