【Fujitomi】Nikkei Average: Lacking clear direction, European conditions may also pressure to the upside

The U.S. and U.K. markets were closed yesterday. Today’s Nikkei index is expected to exhibit a lack of direction while being mindful of the 5-day moving average at 19,707.76 yen (settlement price on the 29th). The yen is strengthening against the euro, trading in the high 120s per euro. Europe’s uncertain outlook—Greece’s debt issue, the U.K. Brexit problem with Prime Minister May saying, “If what is agreed upon is not sufficient, we are prepared to exit without an agreement,” and Italy’s political turmoil—may contribute as negative factors to Tokyo’s stock market.

https://www.fujitomi.co.jp/?p=15537

【Positive factors】

・The Mothers Index extended its gains for seven consecutive days, with active rotation into theme stocks

・Domestic capital expenditure expected to grow in double digits for the first time in four years

・Dividends from listed companies continuing to reach record highs for the fifth year in a row

・Expectations for demand-supply support from Bank of Japan ETF purchases

・Strong appetite for profitable stocks and themes

・Samsung to double capacity with a trillion-yen investment

【Negative factors】

・European stock markets: slight declines, Italian shares plunging on political uncertainty

・Italy may hold elections as early as autumn

・Euro-area money supply in April underwhelmed expectations

・Caution regarding U.S. presidential impeachment

・Geopolitical risk on the Korean peninsula

・Opacity in policy management under the Trump administration

・Continued push to correct the U.S. dollar strength

【Other notable points】

・China, Hong Kong (Dragon Boat Festival), closed

・U.S. stock market closed for Memorial Day

・NY FX — quiet due to U.S. and U.K. holidays, but ZAR weak

・European bonds—yields of Germany and Italy widening

・Bitcoin price volatile with no intrinsic valuation

・UK Prime Minister appeals to voters for strong support to counter the EU’s “aggressive” stance

・“Prepared to exit the EU without an agreement” — Prime Minister May, Sky News

・Sterling recovers; polls show ruling Conservative Party victory — European markets

・Greece’s lenders say debt relief is needed by June — Finance Minister Chakarlotos

・Italy may hold elections in autumn; major parties support reform proposals

・U.S. considering safeguards on solar cell imports, notifying WTO member countries

・North Korea missile launch described as “extremely rude” by Trump

・France’s Macron condemns two Russian media outlets for spreading fake news

《Schedule》

08:30 April unemployment rate

08:30 April real job openings ratio

08:30 April Family Income and Expenditure Survey

08:50 April Commercial Sales Statistics (for release)

14:00 BOJ-calculated April CPI (excluding fresh food and energy)

07:45 April New Zealand (NZ) building consents

10:30 April Australia building approvals

15:00 April German import prices

15:00 April South African M3 money supply

15:45 May French consumer confidence index

15:45 April French household consumption

15:45 Q1–Q1 revised French GDP

16:00 May Switzerland KOF leading indicator

18:00 May Eurozone consumer confidence

19:15 Reijoinen, Governor of the Bank of Finland, speech

21:00 May German consumer price index (CPI) flash

21:30 Q1 Canada current account

21:30 April Canada machinery and equipment prices

21:30 April Canada raw material price index

21:30 April U.S. personal consumption expenditures

Personal income (

PCE core deflator

22:00 March U.S. Case-Shiller home price index

23:00 May U.S. consumer confidence

01:00 on the 31st Brainerd, FRB Governor, speech

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