Tokyo market opens, attention on the statements of the incoming and outgoing FRB chairpersons! ~ Highlights and schedule for January 4 ~
Many people appeared to exit during yesterday's flash crash. It reminded us again that trading in illiquid conditions requires caution. I’ll paste a tweet summarizing the flash crash for reference...
I checked the low prices from major FX companies regarding the USD/JPY flash crash
— Y. Takajo (@takagifx)January 3, 2019
The lows range from about 103.51 to the 105.98 area, with big differences between firms... Some firms even failed to provide 1-minute data or to execute trades, and it seems the time was lengthy. The spreads also looked terrible.pic.twitter.com/BqJnUjx9SD
◎ Today’s Points of Focus
1) Market reaction at the start of the year in Japan
We will be watching how the flash crash is perceived. In the US and Europe, stocks fell sharply in response. While market interpretations are important, I also want to pay attention to statements from central banks and finance ministers.
2) Economic indicators
Today’s release is the employment statistics. Recently, employment data have been relatively inactive. However, yesterday’s ISM Manufacturing PMI moved significantly. After the flash crash, with upper levels weighed down, the weak result contributed to a large drop. Today’s employment data could also fall sharply depending on the details.
Additionally, many European PMI figures are being released. PMI is a leading index. With concerns about a European economy slowdown, attention is especially on France, Germany, and Italy.
3) Statements from the new and former FRB chiefs
Today features statements from Chair Jerome Powell, former Chair Janet Yellen, and former Chair Ben Bernanke. The market is focusing on expectations for the number of rate hikes this year. Hot topics include the “neutral rate” and the timing of the end of rate hikes. These are statements by highly watched officials, and large moves are likely.
◎ Today’s Event Schedule
1/4 (Friday)
10:45 CNY - Caixin Services PMI
16:00 GBP - House Price Index
16:30 SEK - Sweden Services PMI
16:45 EUR - France HICP (Consumer Price Index)
17:45 EUR - Italy Composite & Services PMI
17:50 EUR - France Composite & Services PMI
17:55 EUR - Germany Composite & Services PMI
18:00 EUR - Euro Area Composite & Services PMI
18:00 EUR - Italy HICP (Consumer Price Index)
18:30 GBP - Services PMI
19:00 EUR - Euro Area HICP (Consumer Price Index)
22:30 USDNFP Employment Statistics, Unemployment Rate, and Average Hourly Earnings
22:30 CADNonfarm Payrolls, Unemployment Rate
23:45 USD - Composite & Services PMI
1/5 (Saturday)
00:15 USDPowell (FRB) and Yellen (former FRB) and Bernanke (former FRB) speeches (AEA Annual Conference interview)
00:15 USD - Fed Chair Powell and President of the Atlanta Fed (L. Bostic) speeches
01:00 USD - Crude oil inventories
03:00 USD - Baker Hughes Rig Count
