The market is off to a relatively quiet start this week. The forex market, in particular, is in a stalemate. The USD/JPY is trading in the mid-157 yen range, EUR/USD is around 1.07, and EUR/JPY is in the mid-168 yen range. This morning in Tokyo, a series of Chinese economic statistics were released: new home sales prices fell further, industrial production fell short of expectations, while retail sales exceeded forecasts. Shanghai stocks are in negative territory, Hong Kong stocks are positive, showing mixed movements. Singapore markets are closed today, reducing the number of market participants, contributing to the wait-and-see mood.
Upcoming economic indicators to be released in the overseas market include Canada’s housing starts (May), Canada’s international securities transactions (April), and the New York Fed manufacturing index (June). The market consensus for the NY Fed index is -11.3, an improvement from the previous -15.6. However, compared to last week’s series of events, these indicators seem to be less significant.
Regarding speech events, BOJ Governor Ueda is scheduled to attend the House of Representatives Budget Administration Oversight Committee around 4:30 PM Japan time. Later, speeches from ECB Chief Economist Lane, ECB Executive Board member De Guindos, and Philadelphia Fed President Harker are scheduled.
In the London market later, the focus will be on Governor Ueda’s comments. Last week’s BOJ decision meeting deferred detailed discussions on reducing bond purchases to July, prompting yen selling. However, Governor Ueda suggested in a press conference that a rate hike in July could be possible depending on the data.
In Europe, the political uncertainty in France is likely to remain a theme this week. Reports indicate that the ECB is not planning to discuss an emergency purchase of French bonds. The fact that such reports exist indicates that the market is seriously concerned about the decline in French bonds. Attention will also be on additional news and bond trends.
Last week’s FOMC saw members’ rate forecasts change from three rate cuts this year to one. The market is pricing in about two rate cuts this year. Philadelphia Fed President Harker is scheduled to speak on the economic outlook, and his views on interest rates will be important to monitor.
Today, with no significant indicators, the market is expected to remain in a range-bound trend. The basic plan is to observe the market calmly.
