Chinese Economic Stimulus Measures Bring Relief, Quietly Approaching the Weekend
This week, the U.S. dollar has been strengthening, especially after U.S. retail sales surpassed expectations, reinforcing the impression of the U.S. economy’s strength in the market. As a result, expectations for significant interest rate cuts by U.S. financial authorities have diminished. The market is starting to price in a gradual rate-cutting pace, and the dollar continues to show strong movement.
Yen Weakness
The yen has also been notable for its weakness. The clear stance of the Bank of Japan and the government not to rush into rate hikes has intensified selling pressure on the yen. Additionally, the view that the U.S. will proceed with gradual rate cuts has pushed the USD/JPY pair up, nearing the 150 yen mark. However, around 150 yen, there have been comments from the government and the finance minister aimed at curbing yen weakness, leading to resistance at this level.
Euro and Pound Movements
Both the euro and the pound are experiencing selling pressure. The pound was briefly sold off due to unexpectedly weak inflation indicators, but it saw temporary buying as strong UK retail sales were released shortly after, leading to a lack of clear direction. The euro continues to face selling pressure due to Germany’s negative growth outlook and the dovish stance at the ECB meeting.
A Breather for Chinese Stocks
Chinese stocks, seen as a risk factor, experienced a pullback after a surge before the National Day holiday, driven by waning expectations. However, following the announcement of additional economic stimulus measures, there has been a rebound in buying. This has temporarily eased concerns about the Chinese market, spreading a sense of relief throughout the overall market.
Upcoming Focus Points
Economic indicators scheduled for today include U.S. housing starts (September), but none are expected to have as significant an impact as those released yesterday, making it likely for a relatively quiet weekend.
Regarding speaking events, the ECB expert forecast survey will be released, and in the U.S., speeches are planned by Atlanta Fed President Bostic, Minneapolis Fed President Kashkari, and Fed Governor Waller.
Today’s Strategy
Comments from Bank of Japan Governor Ueda confirm that the BoJ is not in a hurry to raise interest rates for the time being. As a result, the yen has begun to weaken again, and I am considering entries with a yen selling perspective at an opportune time.
