Risk-on market after midterm elections end! ~ Highlights and schedule for November 8 ~
◎ Today's Highlights
1) US midterm elections concluded
The midterm elections, which were a risk event, ended with the results as expected. The market seems to digest the results and regain calm. Looking at stock prices, the VIX index, and long-term interest rates, what had been priced in as risk events appears to be unwinding. It seems we’re entering a risk-on environment, and the Australian and New Zealand currencies are being bought.
It is worth watching how long the risk-on environment continues.
The strategy after yesterday’s midterm elections is summarized below.
2)FOMC
Today the FOMC meets, but since there will be no press conference, policy changes are unlikely. With December rate hike considered certain, attention is on the number of rate hikes next year. Therefore, the focus is on the statement—any changes to the rate outlook and the economic outlook. We will also watch to see whether protectionist policies or other factors will have an impact.
3)European risks
Next Thursday the 13th is the deadline for Italy’s budget revisions. As tensions between Italy and the EU deepen, there is rising activity among far-right parties across Europe. Steve Bannon, former Trump campaign adviser, has entered Europe and is connecting with far-right party leaders. Far-right parties are advancing in various countries as well. We will watch statements related to Italy’s budget and the movements of far-right parties across the region.
4)Brexit negotiation issues
The pound has been rising on expectations of a Brexit deal, but there has been no definitive confirmation, and it would not be surprising to see negative or opposing reports appear at any time. The key point is whether the November EU summit will be held. If confirmation of a deal or the planning for an extraordinary EU summit emerges, the pound could rise further. Conversely, if negative reports surface, the pound could retrace. We will monitor Brexit-related news.
◎ Today’s Event Schedule
11/8 (Thursday)
16:00 EUR Germany Trade Balance
16:45 EUR France Trade Balance
18:00 EURECB Monthly Report
23:00 MXN CPI (Consumer Price Index)
11/9 (Friday)
00:20 EURDraghi ECB President Speech
04:00 USDFOMC Policy Rate and Policy Statement
09:30 AUDRBA Quarterly Monetary Report
10:30 CNY China CPI (Consumer Price Index)
◎ Weekly Schedule
◎ Record Room
↓↓↓ Yesterday’s stock prices, long-term interest rates, and remarks from leaders are summarized below ↓↓↓
