Recently, the trend of the stock market including the United States has become unstable. Yesterday, the announcement of the financial results of individual companies triggered the depreciation of stock prices, but the overall market conditions are weak.
The central banks of each country, such as the US financial authorities, are struggling to respond to rising inflation, and it seems that there is an atmosphere that they have no choice but to raise interest rates significantly. ECB Governor Christine Lagarde said yesterday that he had “margin” on the surface that he would not rush to raise interest rates, but in reality he would like to get out of the negative interest rate as soon as possible.
Today, the minutes of the US FOMC will be released in the latter half of the NY market. The US financial authorities have already turned to a rate hike, but there are still many uncertainties about the pace and timing of the rate hike. We must avoid being criticized as being too late in the face of the need for dialogue with the market. The soft landing of the economy is the keyword.
On the other hand, the market has already entered the risk aversion phase. Yields on US bonds have fallen as stock prices have fallen. The dollar is depreciating in the foreign exchange market.
After passing the event of the US FOMC minutes, it seems that the point will be whether the market centered on the stock market will calm down. The minutes will be announced at 3:00 am on the 26th of Japan time.
Economic indicators to be announced in overseas markets after this include the US MBA mortgage application index (week until the 20th), US durable goods orders and preliminary figures (April). Orders for durable goods are expected to grow by about 0.6%, although growth slows from the previous time.
Financial officials’ remarks The event will be scheduled by ECB officials such as Lane Finland Central Bank Governor, Panetta ECB Director, Holtzmann Austrian Central Bank Governor, Lagarde ECB Governor, Dekos Spain Central Bank Governor, Lane ECB Chief Economist and Knott Dutch Central Bank Governor. There are a lot of events to participate in. Remarks by Governor of the Bank of Japan Kuroda, Commissioner of the Bank of England and Central Bank Tenreiro, and Fed Director Brainard are also planned.
The USD is tending to buy back today, probably because the minutes of the US FOMC are coming up. There are still more than 7 hours before the announcement, so we expect to buy more USD tonight.
Conversely, UK PMI data released yesterday suggests a softening of UK growth, with GBP on a selling trend. The market is still conserving expectations for an additional rate hike by the British and Central Banks, but some say that it will raise rates by 0.25 percentage points only once and stop raising rates for the time being. When that happens, the willingness to buy GBP diminishes.
From here, select to sell GBPUSD today.