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International financial news

International financial news

[European central bank announced interest rate cuts and restart QE] The European Central Bank announced that it will cut the deposit rate by 10 basis points to -0.5% for the first time in 2016, with an expected -0.5%. The European Central Bank announced that it will restart QE and will begin to implement an interest rate grading system. From November 1st, it will purchase 20 billion euros/month.

[Drakey: The euro zone needs to be highly accommodative, lowering GDP and inflation expectations this year and next.] Draghi said that the possibility of a recession in the euro zone is low, but the probability is rising, the ECB is ready to adjust all Tools and are providing a lot of monetary stimulus. In the face of the current economic situation in the euro zone, fiscal policy should play a major role. He hinted that European central bankers are divided on restarting QE debt purchases.

[Drakey faces unprecedented resistance, QE measures are opposed by the core countries of the euro zone] According to informed officials, central bank governors of several core countries in the euro zone such as France, the Netherlands and Germany opposed the ECB President Draghi to restart QE. Decide. According to informed officials, one of the key factors that other policymakers oppose Draghi to restart QE is that they believe QE is more suitable as an emergency measure in an emergency, such as the Brexit without a transitional agreement. Spokesmen for Austria, the Netherlands, Estonia, France and the German central bank declined to comment on the ECB's discussions, and a spokesman for the European Central Bank declined to comment.

[US 2019 fiscal year is not over, the budget deficit has exceeded 1 trillion US dollars] US budget deficit in August is 200 billion US dollars, making the overall budget deficit in the first 11 months of 2019 fiscal year as high as 1.067 trillion US dollars, up 19% year-on-year It is the first time since 2012 that it has crossed the threshold of trillions of dollars and reached a seven-year high. The White House had previously predicted that the US federal budget deficit would remain above $1 trillion for the next four years.



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Mitsubishi UFJ: Maintaining a neutral position against the USD/JPY in the short term

The Bank of Japan is not expected to change its policy. It is expected that the USD/JPY will fluctuate between 106.50-109.50 next week. A further rise in the dollar against the yen seems unlikely. Considering that the possibility of the Fed cutting interest rates by 25 basis points next week has been priced by the market, and Fed Chairman Powell did not provide any special tips, the market will focus on the dot matrix. The market expects to cut interest rates twice during the year, and if the dot chart shows that it will stop cutting interest rates, it may push up US long-term interest rates.

Dansk Bank: The Bank of Japan is expected to remain inactive, but the possibility of taking action is growing

The Bank of Japan is expected to maintain its QQE and yield curve control policies unchanged. The Japanese economy is still strengthening, and the central bank should be patient, given the limited tools left by the Bank of Japan. The increase in consumption tax and global political uncertainty have brought risks to the Japanese economy and brought upward pressure on the yen, so the possibility of further monetary easing has risen. We expect the USD/JPY to maintain a downward trend. The target for the next three months is at the 105 level and still see a huge potential below this target.

National Australia Bank: AUD/USD target looks at 0.7000/25

The National Australia Bank released a technical analysis report saying that the Australian dollar is moving upwards against the US dollar, with a target of 0.7000/25. In the medium term, the action has lost its pulse structure, which is reflected in the multiple weekly lines in August. Last week's pulsed decline confirmed that the medium-term downtrend was solid, but the risk of an upside reversal has also climbed. The weekly RSI relative strength indicator is currently breaking through the medium-term trend line, so the medium-term uptrend has been confirmed. It is expected that the currency pair is expected to test the trend resistance of 0.7000/25 in the next few weeks. If the weekly line closes above the area, it will open the door to the 0.7200/50 attack in the next few months.

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