Can it continue the rise in U.S. stocks from last weekend?! Tokyo market officially starts! ~ Points to watch and schedule for January 7 ~
Last weekend brought a surprising NFP employment increase of 310,000. The notable average hourly earnings also came in higher than expected at 3.2%. With a strong result, the dollar/yen rose, but the flow turned to dollar selling on Chair Powell's hawkish stance signaling a pause in rate hikes!
Chair Powell's remarks have shown a changing stance at the end of October and November last year as well. Yesterday again, the stance shifted. Markets are increasingly frustrated by these repeatedly changing stances.
As the new year truly begins this week, the Tokyo market will digest last weekend's events to see whether stocks will rise, and whether volatility will occur. A week of close attention has begun.
◎ Today's Points of Focus
1) U.S. Congress and President Trump
The ongoing issue of partial government shutdowns seems likely to prolong. For President Trump, building a wall on the Mexican border appears non-negotiable, raising concerns about using presidential powers or a state of emergency to fund the wall.
Trump faces numerous risks, including a potential withdrawal of U.S. troops from Syria, the Russia inquiry, and U.S.-China trade talks. Will risk-off unwind continue? Or will risk-off pressures reemerge? All eyes are on this.
2) ISM Non-Manufacturing PMI
Last week’s ISM Manufacturing PMI came in weaker than expected. After the flash crash, it reacted sensitively to dollar selling. Although the payrolls data released afterward were strong, dollar buying remained limited. Today the ISM Non-Manufacturing PMI is released. Will it show a strong result or a weak one? How will the market react to the outcome?
3) Global Risk-Off Trend: Will it Persist?
As noted above, risk-off pressures can originate from the U.S., but there are also risk factors from China, Europe, and the U.K., among others.
Pay attention to indices that are sensitive to risk-on/off sentiments.
- U.S. stock market’s three indices
- Long-term interest rate yields
- VIX index
- Oil prices
- Gold prices
- Dollar index
These are items I would like to monitor.
◎ Today’s Economic Events Schedule
Monday, January 7
06:30 AUD Manufacturing PMI
19:00 EUR Euro-area Retail Sales
21:45 EURSpeech byECB Vice President Dovish
Tuesday, January 8
00:00 USDISM Non-Manufacturing PMI
00:00 CAD Ivey PMI
02:40 USD Bositis-Atlanta Fed President’s Speech
09:30 AUD Trade Balance
