教養チャンネル wrote a post · Oct 17, 2023 11:25

Breaking news: President Biden announces visit to Israel.

● Visit to Israel

President Biden will visit Israel, which is in conflict with the Islamic organization Hamas, on the 18th. Considering Prime Minister Netanyahu's invitation, the United States clearly shows its support for Israel, an allied country.

The escalation of war may be contained and there is a possibility of a temporary pause. Crude oil prices have been sharply rising so far, but this is also considered a reason for the decline as funds flow back into the dollar (rotation).

● New Zealand Dollar

The ruling party suffered a defeat in the weekend's general election. A change of government after 6 years. The new administration will focus on combating inflation (interest rate hikes).

For the foreign exchange market, the New Zealand Dollar is a buying factor. The Australian Dollar is also rising, contributing to a temporary respite in the strengthening of the US Dollar at the beginning of the week.

● Earnings and Federal Reserve Board Interest Rates

In the short term, there may be an optimistic view among investors. High interest rates, rising oil prices, inflation, and ongoing geopolitical risks in the Middle East. Volatile market developments are also expected towards the end of the year.

The unemployment rate is on a downward trend, so unless this trend is reversed, implementing measures to combat inflation will not be considered a fundamental solution.

● Long-awaited intervention

・ Minister of Finance, Makoto Kanda

If the exchange rate sharply declines, the country will either raise interest rates to stop capital outflows, or intervene in the exchange market to counter excessive fluctuations. One indicator is the 150 yen per dollar line. The government and the Bank of Japan are cautious of rapid changes in order to avoid intervention, but it is believed that the possibility of intervention is high within a few days.

● Borrowing costs

Rising interest rates increase borrowing costs. Limited housing inventory leads to shortages, pushing up housing prices.

Rising interest rates not only increase borrowing costs for those considering home purchases, but also lead to a decrease in inventory. Shortages lead to overall price increases, with a scarcity of potential buyers.

● US stocks

US stock prices are rising. In order to prevent the conflict between Israel and the Islamic organization Hamas from spreading throughout the Middle East, there is a tailwind. The S&P 500 stock price index is up more than 1%. → However, the earnings outlook for US companies is deteriorating, with a possibility of continued sluggishness. The ratio of companies revising their earnings outlook upward is rapidly decreasing.

● cryptocurrency departure

Bitcoin, a cryptocurrency that had surged 10%, is now narrowing its gain. → Blackrock announced that the application for a bitcoin physically backed exchange-traded fund (ETF) is still under review by the Securities and Exchange Commission (SEC).