Danske Research Team
Danske Bank A/S
Market movers today
COVID-19 will continue to be in focus. Yesterday we published Research COVID-19: Closer to the peak in bad news , where we look at what to expect.
We do not expect any changes from the Bank of England today. It recently cut rates down to 0.1%, started a GBP200bn QE programme and yesterday a Contingent Term Repo Facility was announced to ease signs of stress in the UK money market. If anything, we think the Bank of England may increase its QE programme further at some point, as it remains small compared to peers.
Today we get a bunch of sentiment indicators in Europe. France and Sweden release business confidence for March, which is likely to show a steep decline due to the spread of COVID-19. Swedish consumer confidence will also be interesting to see how households are affected by the crisis.
In the US the weekly initial jobless claims will give more insight to how much unemployment is set to rise . Consensus looks for a record increase from 281k to 1500k (1.5 million!) but we will not be surprised to see an even higher number given some of the regional news stories.
The US also releases data on core PCE inflation.
Selected market news
While we may have seen early signs of improvement in Italy, things are looking worse in Spain. Yesterday, fatalities in Spain rose by 738 to a total of 3,434. In the US, fatalities have risen above 1,000. On a global scale, the number of cases is now above 451,000 and there are more than 20,000 deaths. Yesterday we published Research COVID-19: Closer to the peak in bad news , where we look at what to expect.
The US Senate approved the USD2,000bn spending package . The deal includes USD500bn in direct payments to Americans, USD500bn for large companies including more money into the Exchange Stabilization Fund, which can be used as guarantees in the Fed's various credit facilities, USD350bn for loans to small businesses, USD350bn worth of tax cuts mainly by cutting payroll taxes, higher unemployment benefits and USD150bn funding for hospitals. The House is set to vote on the deal tomorrow and it is expected to pass without too many problems although it may hit some obstacles.
Yesterday, we published our weekly Danish spending monitor tracking total spending on a daily basis during the COVID-19 crisis. Data up to and including 23 March shows that the significant shifts in consumption since early March, notably since the announcement of extensive lockdown measures on 11 March, have continued. For more see Spending Monitor: Significant shifts in Danish spending continue, as overall consumption drops, 25 March.
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