A week focused on U.S.-China relations with emphasis on China, "Key points and events schedule for the week of May 25"

 

Last week, expectations for additional easing rose at the start of the week as the Bank of Japan was expected to hold an emergency monetary policy meeting, but the outcome did not involve additional easing regarding the financing framework for small and medium-sized enterprises.

 

The also-watched WHO annual assembly, as anticipated, became a stage for China’s appeals, and Taiwan was not allowed to attend.

A decision was adopted that an investigation into the causes of the spread of infections was necessary, but it stated that it would be carried out at an appropriate time, leaving doubts about whether there is real intent to investigate.

 

U.S. President Trump has intensified criticism of China, and this week the U.S.-China confrontation is likely to deepen.

 

 

◎ Points of Focus This Week

 

1) U.S.-China Relations

 

From the 22nd last week, China held the National People's Congress and announced the introduction of the national security law covering places such as Hong Kong.

In response to the national security law, the United States, Canada, the United Kingdom, and Austria issued a joint statement expressing concerns.

In Hong Kong, calls to resume demonstrations have begun.

 

In the United States, pressure on Chinese companies has begun, with stricter listing conditions in stock markets.

In response, Baidu of China has considered withdrawing from the Nasdaq market, and confrontations between the U.S. and China have intensified.

The National People’s Congress runs until the 28th, and this week the U.S.-China confrontation seems set to intensify further.

 

 

 

2) China Relations

 

Beyond the United States and China, relations with China are becoming a problem.

 

The United Kingdom seems to have shifted toward excluding Chinese companies from 5G.

It is thought that this may align the United States, which is negotiating FTAs, with U.S. criticisms of China.

 

Taiwan has repeatedly criticized the national security law and has deepened ties with the United States, including importing weapons from the U.S.

The United States has sent congratulations to Tsai Ing-wen, among other gestures.

 

Australia has drawn China’s anger by saying that it needs to investigate the causes of the spread of the coronavirus, and has faced retaliation from China.

China has also repeated retaliatory actions toward Australia, suggesting they are responding to U.S. pressure.

 

It is important to watch whether one sides with China or the United States, and what kind of retaliation will occur if aligned with China.

 

 

 

3) Oil Prices

 

Last week, there was a rollover in WTI crude futures, but it passed without confusion.

Prices have remained around $33 per barrel, above $30.

Oil prices appear to be moving as a leading indicator of economic recovery, so attention is on whether the $30 level can be maintained.

 

 

 

 

◎ This Week’s Event Schedule

 

 

May 25 (Monday)

 

U.S. and U.K. markets closed

 

15:00 EUR Germany GDP (Q1)

17:00 EUR Germany IFO Business Climate

 

 

May 26 (Tuesday)

 

04:00 CADPoloz, BOC Governor Speech

07:45 NZD NZ Trade Balance

15:00 EUR Germany GfK Consumer Confidence

20:00 MXN Mexico GDP (Q1)

21:45 EUR Lane ECB Executive Board Member Speech

23:00 USD U.S. Consumer Confidence

 

 

May 27 (Wednesday)

 

02:00 USD Kashkari Minneapolis Fed President Speech

06:00 NZD RBNZ Financial Stability Report

16:30 EURLagarde ECB President Speech

17:00 EUR ECB Financial Stability Report

20:00 MXN Mexico Unemployment Rate

 

 

May 28 (Thursday)

 

01:30 USD Bullard St. Louis Fed President Speech

03:00 USD Beige Book

16:00 EUR Spain HICP (Consumer Price Index)

21:00 EUR Germany HICP (CPI)

21:30 USDU.S. GDP (Q1) • Durable Goods Orders • Initial Jobless Claims

23:00 USD U.S. Existing Home Sales Pending

 

 

May 29 (Friday)

 

00:00 USDCrude Oil Inventories

00:00 MXN Mexico Monetary Policy Meeting Minutes

00:00 USDWilliams, New York Fed President Speech

08:30 JPY Japan April Unemployment Rate

15:00 EUR Germany Retail Sales

15:45 EUR France HICP (CPI) • GDP (Q1)

16:00 TRY Turkey GDP (Q1)

16:30 SEK Sweden GDP (Q1)

18:00 EUR Italy HICP (CPI)

18:00 EUR Euro Area HICP (CPI)

21:30 USD PCE Deflator

21:30 CADCanada GDP (Q1)

23:00 USD University of Michigan Consumer Confidence Index

 

 

May 30 (Saturday)

 

02:00 USD Baker Hughes Rig Count

 

 

 

 

 

 

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