U.S. GDP速報値発表！ 指標結果と世界株価に注目！ ～10月26日の注目点～
◎Today's Highlights
1)U.S. GDP Quick Update
Today’s release of the U.S. GDP quick estimate questions how much disasters such as hurricanes will affect the economy. The quick estimate often diverges from actual results. As noted above, when disasters occur, forecasts tend to be harder to predict and the dispersion increases. Market expectations may already factor in disasters, with a slightly lower forecast than the previous period. If today's result comes in below expectations, it could lead to dollar selling. Watch the GDP quick estimate result closely.
2)Italy Budget and Rating
In yesterday’s ECB meeting, Italy’s budget plan was flagged as a concern. Italy remains unwilling to revise its budget. Long-term yields are rising. Against this backdrop, today S&P’s rating review is announced. S&P’s Italy rating is “BBB,” the second-lowest tier of investment grade. A two-notch downgrade would put Italian bonds into junk status, removing them from investment grade.
S&P Sovereign Rating List – as of September 30, 2018
If Italy is downgraded, yields will rise. This increases funding costs and raises concerns about a financial crisis. The Italy crisis could cascade to Spain, Portugal, and other countries, potentially re-trigging a Greek-style shock. All eyes on today’s Italy rating announcement.
Moody’s Rating Announcement, Italy Downgraded! – FX Education: What are Ratings?
3)Brexit Negotiations and UK Politics
Prime Minister May, after the EU summit, gave a speech in Parliament recounting the negotiations and progress, and addressed party members to avoid a vote of no-confidence. Even after overcoming that milestone, there was no substantial rebound in the pound. Hovering uncertainty over a no-deal Brexit seems to be weighing on the pound. Focus on statements and headlines regarding Brexit talks, especially the Irish border issue.
4)Stock Declines and Volatility
U.S., Japanese, Chinese, and European stocks have been highly volatile. U.S. equities had risen during the Trump rally, but fell by about half in just a few days. Yesterday saw a sharp rebound. The Nikkei fell over 800 points from the previous close. This is a record-like drop comparable to Brexit and the Trump election era. The falls in the U.S. and Japan appear linked to corporate earnings outlooks, with deterioration heavily influenced by U.S.-China tariff tensions. Trump policy distortions are becoming more evident. European stocks declined due to Italy concerns and Brexit concerns. Global stock prices are highly volatile; stay attentive to market movements.
5)Currency Weakness and the Dollar Index
The euro and pound are being sold on the concerns listed above. Conversely, the dollar continues to rise as rate hikes persist in the U.S., leading to a stronger dollar. Two key focuses are the high level of the dollar index and the yuan. The yuan has reached new lows against the dollar. With the U.S. running a trade deficit, this development is unwelcome. Additional tariffs or other countermeasures could emerge. The dollar index is also approaching high levels. President Trump, who dislikes a strong dollar, may voice currency-strength concerns.
USD/CNY Daily Chart
Dollar Index Chart
◎ Today’s Economic Calendar
10/26 (Friday)
S&P Italy Rating Review
10:00 USD Mayer / Cleveland Federal Reserve President speaking
21:30 USDGDP (preliminary)
23:00 USD University of Michigan Consumer Confidence Index
23:00 EURDraghi ECB President speaking
23:15 EURECB Governing Council member speaking
10/27 (Saturday)
02:00 USD Baker Hughes Rig Count
10/28 (Sunday)
London ends daylight saving time
◎ Recording Room
↓↓↓ Recording yesterday’s stock prices, interest rates, and key speakers ↓↓↓
Recording for October 26 – Rates, Stocks, and Long-Term Rates
