Risk-off yen buying and franc buying! Euro selling after Draghi night! Will it continue today as well?? ~ January 25 highlights and event schedule ~

ECB Council, weak European economic indicators, downward revision of Germany's economic outlook, …

Even technically, the euro was in a fragile state.

The environment for euro selling was ready, and as stop losses were swept up, the near-term lows were broken.

◎Today's Highlights

1) After the ECB Council and European Economy

At yesterday's ECB meeting and Draghi's press conference, overall the tone was dovish. Of particular note was that LTRO and TLTRO were considered. Although not decided, the consideration itself was seen as accommodative. Also, there was no change to the timing of rate hikes as of December.

Additionally, yesterday Germany and France PMI data were released. The readings were poor. Furthermore, Germany's economy minister sharply revised Germany's economic outlook from 1.8% to 1.0%. Euro selling has accelerated.

Today's German sentiment index warrants attention as well.

ECB Council Euro/Sterling Selling Strategy! ~ January 24 Strategy ~

2) U.S.-China Relations and the Budget

Yesterday, comments by U.S. Commerce Secretary Wilbur Ross sent risk-off sentiment surging. It seems progress in trade talks will still take time. If there is no progress in trade talks, a risk-off trend is likely to continue.

Also, in the chaotic U.S. Congress, the budget bills for the wall and the Democratic plan failed to secure a majority, so no budget agreement was reached. This means the government shutdown continues. President Trump's annual State of the Union address is likely to be postponed.

If either U.S.-China relations or the budget issue resolves, a reverse risk-off unwind is expected. This is a key area to watch.

Impact of Government Shutdown and Its Effects

3) Davos World Economic Forum

At the Davos World Economic Forum, many leaders gather to discuss economics, so there is a high likelihood of influential statements and headlines. This warrants close attention.

4) UK Parliament and the Withdrawal Agreement

In the UK Parliament, debate continues to amend the Withdrawal Agreement. A vote is scheduled for next week on the 29th. Rather than the specifics, the focus is on whether there will be a no-deal Brexit. On the EU side, it seems efforts are being made to avoid a no-deal Brexit by offering concessions or extensions of the withdrawal deadline.

I will be paying attention to statements from EU and UK officials.

5) Timing Factors

Today is the 25th, a semi-monthly timing factor. Weekend and month-end factors will also come into play. Be cautious ahead of the daily fix in Tokyo and the London FIX.

◎Today's Economic Calendar

Friday, January 25

Davros World Economic Forum (World Economic Forum Annual Meeting)

01:00　USD　Crude Oil Inventories

17:30　SEK　Sweden Retail

18:00　EUR　Germany IFO Business Climate Index

22:30　USD　Durable Goods Orders and Core Durable Goods

Saturday, January 26

03:00　USD　Baker Hughes Rig Count