Focus on the Conservative Party Conference in the UK and US trade negotiations! ～Strategy, outlook, and schedule for September 25～

◎ Current positions and strategies

Today is the 50-day factor, month-end week, and ahead of the FOMC, so I would like to proceed with a wait-and-see approach.

Also yesterday,I opened a new Long CAD/JPY position.According to yesterday's reports,OPEC and non-OPEC producers decided not to cut production. WTI prices have been moving up steadily. It is likely already priced in that NAFTA renegotiations will be unfavorable. Based on these factors, I considered a CAD-buying strategy. Also, due to the risk-on environment, I chose JPY as the pair’s currency.

◎ Today’s Points of Attention

1)UK Labour Party Conference

The UK is becoming noisy. There are moves to propose alternative withdrawal plans, second referendum, and a snap election regarding May's withdrawal plan. The Labour Party is in its party conference, while the ruling Conservative Party is preparing for theirs. It wouldn’t be surprising whatever comes out. Caution is needed until the conference ends. Because attention is rising, rapid fluctuations are likely.

2)Japan-U.S. trade negotiations

The Japan-U.S. trade talks, which were scheduled to begin this morning, have been postponed to tomorrow. Attention is on whether talks with Canada (NAFTA renegotiations) are prioritized, or whether pre-negotiations have not yet come together. Depending on the contents, it could weigh on the Nikkei and on USD/JPY.

3)U.S.-China trade war

The third round of additional tariffs on China, which had been scheduled yesterday, has been enacted. China has also imposed retaliatory tariffs on the U.S. The U.S.-China trade war has intensified. However, these追加 tariffs were priced in, while the Chinese side’s decision to delay U.S.-China trade talks raises concerns about a prolonged trade war. Globally, led by the U.S., stock prices are on a downward trend. Looking at long-term interest rates, it does not yet feel like a full risk-off. I want to focus on long-term rates and future trade talks. Also, I want to pay attention to the yuan’s level.

USD/CNY daily chart

USD/CNY intraday chart

◎ Today’s Economic Indicators Schedule

9/25 (Tuesday)

UK Labour Party Conference
Japan-U.S. Trade Talks
U.S.-EU Trade Talks

02:00 USD 2-year Treasury Auction
08:50 JPY Minutes of the Policy Meeting (7/31)
14:30 JPY BoJ Governor Kuroda Remarks
17:10 EUR ECB Executive Board Member Praet Remarks
17:30 EUR Governor of Bank of Portugal Costa Remarks
17:40 GBP BOEExternal Director Brija Remarks
23:00 USD Consumer Confidence Index

9/26 (Wednesday)

UK Labour Party Conference
Japan-U.S. Summit

02:00 USD 5-year Treasury Auction
07:45 NZD Trade Balance

◎ Recording Room

↓↓↓ 기록에 남겨두고 있습니다: 매일의 통화 강도 그래프, 세계 주식 가격, 각국 장기 금리, 인물 발언을 기록합니다 ↓↓↓

Recording room for September 24, 2018 — Key statements and long-term rates