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International Financial Information

International Financial Information


[The European Central Bank unexpectedly stabilized interest rates and increased quantitative easing, net asset purchases will increase by 120 billion euros] People familiar with the matter said that although the market is widely expected to cut interest rates on Thursday, policymakers did not even raise interest rates at the meeting. Recommendation; the management board discussed how to respond to public health events in a gloomy atmosphere, and officials acknowledged that monetary policy alone was powerless.

[Fed announced that it will carry out debt purchase operations] The Fed introduced major measures to alleviate the market liquidity pressure caused by the epidemic. The New York Fed announced a three-month repurchase of $ 500 billion and a one-month repurchase of $ 500 billion. The Fed injected a lot of liquidity into the market and expanded its purchases of US government securities, a move reminiscent of the quantitative easing policy adopted during the financial crisis.

[New York Fed accepted $ 78.4 billion in securities during the 84-day repurchase operation] The New York Fed announced on its website that it accepted $ 78.4 billion in securities during the 84-day repurchase agreement operation on Thursday. In this operation, US $ 78.4 billion bids were obtained, which is below the ceiling of US $ 500 billion. The New York Fed accepted $ 39.05 billion in US Treasuries during Thursday's operation with a minimum interest rate of 0.25% and a weighted average interest rate of 0.255%.

[U.S. President Trump said that if necessary, emergency powers may be used and the market will have a very large rebound. He does not support the House bill to address the impact of the outbreak]

[The Bank of Canada announced the expansion of the bond purchase program and fixed-term repo operations. The measures are mainly to support market operations. It will temporarily increase 6-month and 12-month fixed-term repo operations. At least once a week unless otherwise notified]


GMT(time)

Currency

News and Data

00:30

EUR

ECB Press Conference

15:30

JPY

Tertiary Industry Activity Index (MoM)

18:00

EUR

German CPI (MoM) (Feb)

19:00

EUR

Spanish CPI (YoY) (Feb)


Summary of Institutional Perspectives


Scotiabank: No matter the fundamentals, the U.S. dollar will benefit from financing and liquidity factors




Scotiabank's chief foreign exchange strategist Shaun Osborne wrote in a report to customers on Thursday that the US dollar may continue to strengthen regardless of the domestic domestic economy because the US dollar financing market is starting to show tension. If the tightening of the US dollar financing situation develops further, fundamentals will not matter, and the dollar will appreciate regardless of more or less Federal Reserve policy initiatives, political decisions, or economic data.

The recent rebound of the US dollar has shown us that the impact of capital tightening may have begun to be noticed; when the pressure of 2008 peaked, among the G-10 and emerging market currencies, the less liquid currency was in the US The rally was hit first. Libor-OIS spreads are widening significantly, although not as severe as when liquidity tightened during the 2008 financial crisis, but "signs of pressure are clear."

Morgan Stanley opens new EUR / JPY short positions




Morgan Stanley's position report on Thursday (March 12) showed that the new short position of the euro against the yen, the entry point is 116.86, the target is 111.00, and the stop loss is set at 119.80; analysts at the bank said that the euro The short operation of the cross against the yen has a very good risk-reward ratio, and it will also be less affected by the Fed's dovish resolution. Our goal is the 111 mark. Potential recession risks in the euro zone have begun to hit the euro, and Japanese investors' purchases of euro zone assets will continue, but this should not affect the exchange rate due to the existence of hedging operations.


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