Davos Meeting Starts with Absence of U.S.-EU Leaders! — Highlights and Event Schedule for January 22

Yesterday the New York market was closed, showing little overall movement. The United Kingdom found the expected Brexit backstop (Plan B) to be a disappointment, and the pound moved less than anticipated. It seems the Brexit plan (Plan B) will be revised moving forward.

Today is the day after the US market holiday, and we’ll see whether the price action returns!?

◎ Today's Points of Attention

1) Davos Economic Forum (World Economic Forum Annual Meeting)

Typically a highly watched and influential event, but this year several leaders, including President Trump, Prime Minister May, and President Macron, have announced their absences. The United States is also withdrawing participation from ministers such as Secretary of the Treasury Mnuchin.

Looking back to last year, Mnuchin’s remarks at Davos welcoming dollar weakness led to a sharp dollar down move and yen appreciation. As the World Economic Forum focuses on economic issues, we should pay attention to the headlines.

2) Government Shutdown and Budget Bill

Last weekend, President Trump showed some concessions to the Democrats on illegal immigration policy. However, the Democrats immediately rejected them. Today, after the holiday, it will be interesting to see how far the discussions proceed with Davos attendance optional.

If the government shutdown continues for too long, impacts will begin to appear everywhere. Trump is caught between Republican supporters and public opinion, placing him in a difficult position.

Considering the next presidential election, failing to build the border wall with Mexico would alienate Republican supporters.

However, given public opinion, government support rates, and polls, the shutdown is generally attributed to Trump’s responsibility. Therefore, the Democrats are unlikely to compromise.

Compromising on border wall construction would cost core supporters, and prolonging the shutdown would lower the popularity of the government and the president. It remains to be seen how they will respond.

About the Government Shutdown and Its Impacts

◎ Today's Event Schedule

Tuesday, January 22

EU Finance Ministers Council

Davos World Economic Forum Annual Meeting

18:30　GBPNon-farm Payrolls, Unemployment Rate, Average Earnings

19:00　EUR　Euro Area & Germany ZEW Economic Sentiment

Wednesday, January 23

Davos World Economic Forum Annual Meeting

Prime Minister Abe's Speech (Davos)

06:45　NZDQuarterly CPI (Consumer Price Index)

08:50　JPY　Trade Balance