Pay attention to the monetary policy changes at the temporary Bank of Japan monetary policy meeting! “Key points and event schedule for May 22”
Yesterday, all currencies showed only small price movements.
The PMI for the US, UK, and Europe is well below the 50 line that marks the dividing point between expansion and contraction, but results exceeded expectations, and it seems the outlook for economic recovery has improved compared to market expectations.
The improved outlook for economic recovery is linked to the expectation of a rebound in crude oil demand, which appears to be a factor contributing to rising oil prices.
With the recovery outlook emerging, the market is shifting to seek the next trading material after the coronavirus, and is likely to be movement with a search for direction; it is believed that the next trading material could be the US-China conflict.
◎ Today’s Focus
1) Bank of Japan Monetary Policy Meeting
Today, an ad hoc monetary policy meeting is scheduled to be held.
The content is about funding methods for small and medium-sized enterprises.
It is anticipated that banks lending to SMEs will add interest to the deposits kept at the Bank of Japan, rather than providing direct credit.
It seems more like bank bailout than monetary easing.
For markets hoping for additional easing, this may be disappointing and could lead to a rise in the yen.
As usual, it will be held from 9:00, with an announcement after the meeting; it is expected to be announced around 12:00.
Watch the stock prices and foreign exchange rates after the announcement.
2) National People's Congress
The National People's Congress, which had been postponed, will begin today.
During the Lehman Brothers crisis, large-scale economic measures were announced and propelled the world economy.
This time, given China's weaker capacity compared to Lehman, it is anticipated that the same type of measures may not be possible.
As China is the world’s second-largest economy, attention is focused on the pace of economic recovery and what kind of economic measures will be proposed, including targets for economic recovery.
In addition to economic measures, issues such as human rights in Hong Kong are drawing attention.
Concerns about suppression of speech and the breakdown of the "one country, two systems" have arisen, and in the United States, human rights legislation for Hong Kong and the Xinjiang Uygur Autonomous Region has passed Congress.
This National People's Congress will be watched to see what content is proposed regarding Hong Kong, Xinjiang, Tibet, and how the United States will respond or react to that content.
There is concern that the NPC could be a trigger for deterioration in the US-China war.
◎ Today’s Event Schedule
May 22, Friday
Opening of the National People’s Congress (NPC)
Ad hoc Bank of Japan monetary policy meeting
08:30 JPY Japan April CPI (Consumer Price Index)
15:00 GBP UK Retail Sales
20:30 EURECB Governing Council meeting minutes
21:30 CAD Canada Retail Sales
23:30 USD Lane ECB Executive Director speech
May 23, Saturday
02:00 USD Baker Hughes Rig Count
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