Attention to Brexit negotiations! EU summit (informal) held ~ September 20 event schedule and points of interest ~

◎ Today's Economic Indicator Schedule

9/20 (Thursday)

EU Summit (informal)
LDP Leadership Election

16:30 CHF SNB Policy Rate Announcement and Statement
17:00 NOKNorway Policy Rate Announcement
17:30 GBPRetail Sales
21:30 USD Philadelphia Fed Manufacturing Index

9/21 (Friday)

Japan-US Trade Talks (Ministerial)
S&P Rebalancing

00:15 EURWrightman, President of the German Bundesbank, Speech
02:20 EURPlagge, ECB Executive Board Member Speech
08:30 JPY CPI (Consumer Price Index)
15:45 EUR France GDP

◎ Today's Focus

1)EU Summit (informal)

Yesterday, after news that Barnier could not accept the proposal from Brexit negotiator, the pound fell sharply. We do not expect a Brexit agreement today, but if there is any progress, the pound could rise. If negative statements emerge, the pound will fall. It is common for 100 pips moves from statements. I will be cautious.

※Recently the EU side appears more conciliatory, while the UK side seems eager to push through their demands. (Slightly bullish on the pound)

2)LDP Leadership Election

Voting and results are scheduled from 13:00, but Abe's re-election is expected. Results may come around 14:00. This is rumor and anomaly-based, but stock prices tend to rise before the leadership election. After the election, stocks may fall. Since voting closes in the Tokyo market late today, be cautious about tomorrow's stock decline.

3)Trade Negotiations

U.S.-Japan trade talks are in focus. Trade talks with Canada and NAFTA renegotiations have not progressed. Deadlines are reportedly by the end of September, and there are statements about bilateral deals with Mexico. A trade war is ongoing with China over tariffs. The U.S. side is considering a fourth round; China has WTO complaints and possible yuan depreciation. Tomorrow, U.S.-Japan trade talks are scheduled. We expect harsher statements or tweets toward Japan. Watch the course of the trade talks closely.

◎ Positions and Strategy

AUD/USD short position was closed, as Chinese stocks did not fall despite yesterday's additional U.S. tariffs.

GBP/JPY long position remaining half was closed, and EUR/GBP short position was added.

EUR/USD short position was taken at 1.1710, treating it as the upper bound of the range.

In risk-on, commodity currencies are being bought. In the short term, I would like to hold long positions in AUD and NZD. However, be mindful of potential pullbacks due to China movements.

◎ Record Room

We record currency strength graphs, stock prices, long-term interest rates, and statements by key figures.

↓↓↓ For September 19, please refer to the following. ↓↓↓

Record Room for September 19, 2018 — Key Figures and Long-Term Rates