Is there a surprise!? Policy rate announcement from the BOJ at 3:00. ~ Points of interest and schedule for December 13 ~

In the UK, a motion of no confidence against Prime Minister May was submitted from within her own party. An urgent confidence vote for Prime Minister May was held. The result was that May's premiership was reaffirmed. During the confidence vote, the pound fluctuated wildly.

◎ Today's Highlights

1)Brexit-related

This morning, the parliamentary motion of no confidence in Prime Minister May was defeated! May will be trusted as Conservative Party leader for at least another year. This means she cannot lead the party leadership contest for at least a year, which provides May with some security.

However, this is a domestic matter. Within the UK Parliament, there remains the possibility that a vote of no confidence in May could arise. Also, although she has been trusted as prime minister, Brexit has not been approved. Going forward, parliamentary explanations and negotiations with the EU for Brexit approval will continue to attract attention.

2)EU Summit

From today for two days, the EU Summit (EU leaders’ meeting) is held. Ideally, the Brexit plan agreed previously would be ratified in the UK, and the Brexit agreement would be formally reached at this EU Summit. However, domestic approval in the UK could not be obtained. Prime Minister May is expected to seek further changes to the Brexit plan at today’s EU Summit, but the EU side has already announced in advance that it will not agree to changes to the Brexit plan.

The EU’s concerns are not only Brexit; there are many other issues. Therefore, at this EU Summit, Brexit is not expected to dominate the agenda. Attention is focused on issues within the EU such as Italy’s budget and France’s fiscal problems.

3)ECB/TCMB/Norges Bank Policy Rate Announcements

Today, three central banks are scheduled to announce policy rates. All three are expected to hold steady. The focus will be on the Turkish Central Bank and the European Central Bank.

In Turkey, the lira has stabilized somewhat, and economic indicators have not been bad. The incentive to aggressively raise rates is diminishing. However, if rates are cut, another round of lira selling could resume. So, moves toward rate hikes or cuts are both challenging. But as an authoritarian state, Turkey’s Central Bank is unpredictable. Markets await any surprises.

For the European Central Bank, the ECB Governing Council is expected to keep rates unchanged, and QE is anticipated to end this month. This is not expected to be a surprise. Attention is on the statement from the Council and President Draghi’s press conference after the meeting, particularly regarding recent economic slowdown and guidance on next year’s rate hikes.

◎ Today's Event Schedule

Thursday the 13th

EU Leaders' Summit (Brussels, through the 14th)

09:01　GBP　UK RICS House Price Balance
16:00　EUR　Germany CPI Final
16:45　EUR　France CPI Final
17:30　CHF　SNB Policy Rate Announcement
17:30　SEK　Sweden Unemployment Rate
18:00　NOK　Norway NB Policy Rate Announcement
20:00　TRYTurkish Central Bank TCMB Policy Rate Announcement
21:45　EURECB Governing Council Policy Rate Announcement
22:30　EURDraghi ECB President Press Conference