Waiting for FOMC Minutes!? Waiting for Trump's Speech!? ~ Highlights and Schedule for January 9 ~
Yesterday, with no standout factors, markets were subdued ahead of the FOMC meeting minutes and ECB Governing Council minutes. The dollar-yen gradually strengthened as the yen weakened, recouping the 109 yen level prior to the flash crash. The stock market rose for the third day, continuing the risk-off unwind.
◎ Today's Highlights
1) FOMC Minutes
In December, the consensus-based rate hike was implemented.
However, before the FOMC, stock prices fell sharply. There was pressure from President Trump for rate cuts. Fed Chair Powell began to express views about neutral rates and the end of rate hikes.
Because of these factors, there were expectations that rates might be kept unchanged in some quarters.
In this FOMC — what were the opinions on the number of hikes this year, on neutral rates, and on a potential recession? This is something to watch.
2) Budget and Mexico Border Wall Funding
From 11:00 today (Japan time), President Trump is scheduled to give a speech about the wall to be built at the Mexico border. The speech is expected to be broadcast live, drawing close attention.
Additionally, opposition Democrats to the wall are expected to announce their opposition and criticism of Trump immediately after the speech. The rift over wall construction and the budget seems to be widening. If the rift deepens and the budget fails to pass, leading to a government shutdown, this would be a risk-off factor. Caution is warranted.
3) U.S.-China Trade Negotiations
The deputy-level U.S.-China trade talks scheduled to run until the 8th did not yield a conclusion. Talks will be extended to the 9th. It remains to be seen whether an agreement will be reached or a breakdown will occur.
4) Canada Policy Rate
Today’s Bank of Canada policy interest rate decision is expected to hold. At this meeting, a statement will be released along with the policy rate decision, followed by a press conference. Key points to watch in the statement and press conference include the outlook on recent oil price declines and the outlook for Canadian rate hikes as the end of U.S. rate hikes appears visible.
◎ Today's Economic Calendar
January 9 (Wednesday)
09:30 AUD Building Permits
16:00 EUR Germany Trade Balance
16:30 CHF CPI (Consumer Price Index)
19:00 EUR Euro Area Unemployment Rate
22:20 USD Fed Chair Powell speech
23:00 MXN CPI (Consumer Price Index)
January 10 (Thursday)
00:00 CAD Policy Rate and StatementPress Conference
00:15 CAD Bank of Canada press conference
00:30 GBPBOE Governor Carney Speech
00:30 USD Crude Oil Inventories
01:30 USDRosengren (Boston Fed) Speech
03:00 USD 10-year Bond Auction
04:00 USDFOMC Minutes
◎ Weekly Schedule
