Pay attention to PMI of the US, UK, EU, and Turkey's policy rate! "May 21 Highlights and Event Schedule"
Yesterday, the much-anticipated crude oil stock release passed without issue, and crude oil prices were able to stay in the 30-dollar range.
Stock prices in the US, Europe, and Japan also trended firmly, creating a risk-on environment, and risk-on currencies, particularly the Oceania currencies, rose.
Today, the Tokyo market is expected to remain cautious ahead of tomorrow's emergency Bank of Japan monetary policy meeting.
In the US and Europe, attention will be on the release of key economic indicators, and the confrontation between China and the United States ahead of the National Congress is likely to worsen.
In the United States yesterday, a bill that would bar Chinese companies from the US stock market passed in session, and President Trump posted tweets such as “you fool…” that are hard to believe coming from a president, showing increasing extremism.
◎ Today's Points of Focus
1) Manufacturing, Services, and Composite PMI
Today, flash PMI readings for Germany, France, the euro area, the UK, and the US will be released.
PMI is an index derived from surveys of business managers about future economic conditions, and is watched as an indicator of future business sentiment.
Especially due to the impact of COVID-19, the current economy being weak is already priced in, and attention is shifting to future economic outlook, which is a factor increasing interest.
Below are today's PMI forecasts.
Since these are flash readings, there is a tendency for forecasts and actual results to diverge.
France
Manufacturing PMI: Forecast 36.1
Services PMI: Forecast 27.8
Composite PMI: Forecast 32.0
Germany
Manufacturing PMI: Forecast 39.2
Services PMI: Forecast 26.6
Composite PMI: Forecast 34.1
Eurozone
Manufacturing PMI: Forecast 38.0
Services PMI: Forecast 25.0
Composite PMI: Forecast 25.0
United Kingdom
Manufacturing PMI: Forecast 35.1
Services PMI: Forecast 20.0
Composite PMI: Forecast 12.9
United States
Manufacturing PMI: Forecast 38.0
Services PMI: Forecast 30.0
Composite PMI: Forecast 32.6
2) Turkish Policy Rate
In Turkey, where the lira has been weakening, the policy rate will be announced.
Last weekend, some hikes were expected, but as of yesterday, a rate cut seems more likely.
The key question is whether a cut today will prevent further lira depreciation.
Watch whether the lira/dollar pair stays below 15 yen, or the lira/dollar pair stays above 7.0 dollars.
Also, whether payments trigger further payments, potentially leading to a Turkish crash, is something to watch.
3) Speeches by Key Figures
Today also features speeches by US officials, with attention on discussions about negative interest rate introduction, YCC (Yield Curve Control), and ETF buybacks.
In addition to monetary policy, statements regarding China will also be closely watched.
◎ Today's Economic Event Schedule
May 21 (Thursday)
08:50 JPY Japan April Trade Balance
11:30 AUDLow RBA Governor remarks
16:15 EURFrance Manufacturing, Services, and Composite PMI (flash)
16:30 EURGermany Manufacturing, Services, and Composite PMI (flash)
16:30 EUR Panetta remarks as ECB Executive Board member
17:00 EUREurozone Manufacturing, Services, and Composite PMI (flash)
17:30 GBPUK Manufacturing, Services, and Composite PMI (flash)
20:00 TRYTurkey Policy Rate Announcement
21:30 USD US Initial Jobless Claims and Philadelphia Fed Manufacturing Index
22:45 USDUS Manufacturing, Services, and Composite PMI (flash)
23:00 USDWilliams, New York Fed President remarks
May 22 (Friday)
National People’s Congress opening ceremony
02:00 USDLael Brainard remarks
03:30 USDPowell remarks
08:30 JPY Japan April CPI (consumer price index)
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