BOE Governor and Deputy Governor testify in the British Parliament; Will the UK also adopt negative interest rates!? "Key points on May 20 and event schedule"
Yesterday, the Bank of Japan announced that an extraordinary monetary policy meeting would be held on the 22nd.
The content is under consideration for a new funding method for financial institutions, but it is expected that the interest rate on demand deposits may be changed in order to provide funds to small and medium-sized enterprises.
Because it is an extraordinary monetary policy meeting, the cross-yen has risen and yen has weakened, but since it does not imply additional easing, after the policy announcement there may be a disappointment and a drop in the cross-yen.
With the Bank of Japan’s extraordinary monetary policy meeting on the 22nd and today’s FOMC minutes in view, the market seems to be searching for a directional sense.
◎ Today’s points of focus
1) UK Parliament testimony
Governor Bailey of the BOE, along with two deputy governors, is scheduled to testify before Parliament.
Recently, BOE Governor Bailey has been opposed to negative rates, while Deputy Governor Broadbent has expressed a willingness for further easing.
Today’s parliamentary testimony will be watched for what it reveals about additional easing and the introduction of negative rates.
Attention will also be paid to the outlook for monetary policy and the economy.
2) China risk factors
The WHO closed yesterday, but the United States criticized WHO and China and hinted at withdrawal, while China criticized the United States.
There is concern that confrontation between the US and China may worsen.
China is increasing attacks on Australia.
In addition to stopping Australian meat imports and imposing an 80.5% tariff on Australian barley, information released yesterday suggests next targets may be Australian wine, dairy products, seafood, oats, and fruit.
It is believed to be retaliation for criticizing China at the WHO, and attention is on what retaliatory measures may come next.
China will hold the National Congress from the 22nd, so there is a possibility of adopting a tougher stance; be careful with statements and headlines.
3) Canadian dollar
Crude oil prices are holding firm and recovering into the 30s.
Following today’s release of crude oil inventories, attention will be on whether the 30-dollar level can be maintained and whether oil price rises can act as a catalyst.
As oil prices rise, the Canadian dollar, which has a high correlation, has risen as well.
Today, Canadian CPI (Consumer Price Index) will be released, so it is worth paying attention together.
◎ Today’s event schedule
Wednesday, May 20
15:00 GBPUK CPI (Consumer Price Index)
18:00 EUR Euro-area HICP (Consumer Price Index) (revised)
21:30 CADCanada CPI (Consumer Price Index)
22:30 GBPBailey (BOE Governor) and Broadbent (BOE Deputy Governor) and Cunliffe (BOE Deputy Governor) testimony (Parliamentary testimony)
23:00 EUR Euro-area Consumer Confidence Index (flash)
23:00 USD Bernanke? – actually Bostic, Atlanta Fed President speech
23:30 USD Crude oil inventories
Thursday, May 21
01:00 USD Bullard, St. Louis Fed President speech
03:00 USDFOMC minutes
08:50 JPY Japan April trade balance
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