Midterm election results announced! The foreign exchange market is moving! ~ Highlights and schedule for November 7 ~
◎ Today's Highlights
1)Results of the U.S. midterm elections and market reactions
The U.S. midterm elections are underway. As exit polls and state-by-state results come out, the markets are likely to react.
Tokyo market (vote counting and exit polls) → London market (counting finished, results known) → New York market (market reaction) → Tokyo market (market influences)
Thus, the Tokyo market is the first to be affected. In Tokyo, not only the foreign exchange but also stock prices are expected to be influenced. Major results are expected by early afternoon. In the House of Representatives, a close race is anticipated, which may take time to determine results.
In Europe and the London market, results are believed to be known, and the market's reaction is expected to become evident. Also, attention will be on President Trump’s statements and tweets following the results.
In the New York market, it is expected to begin fully incorporating the results. Also, those who had viewed the midterms as a risk and held back may start to move, potentially creating trends across currencies.
Tomorrow's Tokyo market may differ from today’s, following the flows of London and New York markets.
Today is volatile, with a possibility of shifts in direction. It will be a day to discern the future trend.
2)RBNZ Policy Interest Rate Announcement
The NZ unemployment rate released today was quite strong. Based on this result, a rate hike tomorrow is unlikely, but if the next rate-hike timing is brought forward or the statement takes a hawkish tone, the NZD could be bought. Especially given that Oceania currencies are at low levels, expectations for rate hikes could trigger significant buying. I would pay attention to tomorrow's statement.
3)Brexit negotiations and the UK Parliament
The pound has been rising gradually on expectations of a Brexit deal. Yesterday, Prime Minister May summoned Parliament to seek understanding of the Brexit proposal. The UK Parliament reportedly held a closed session, without journalists. It remains to be seen whether they can secure support from UK MPs.
Even if an agreement with the EU is reached, it must be supported domestically; support in the UK is necessary, and even if it is supported in the UK, it needs EU agreement to have meaning.
We are in the final stage of coordinating between the EU and the UK. If either side reports agreement or support, the pound will be bought; if either side makes critical remarks or reports, the pound will be sold. I will watch statements and headlines closely.
◎ Today's Event Schedule
1/7 (Wednesday)
U.S. midterm elections – vote counting
11:00 NZD – Expected inflation rate
17:30 GBP – Halifax House Price Index
19:00 EUR – Eurozone Retail Sales
11/8 (Thursday)
00:00 CAD – Ivey PMI
00:30 USD – Crude oil inventories
03:00 USD – 30-year government bond auction
05:00 NZD – Policy rate and statement
◎ Weekly Schedule
◎ Records Room
↓↓↓ Summary of stock prices, long-term interest rates, and remarks from key figures is below ↓↓↓
November 6 Records Room – Stock prices, interest rates, key remarks
