Week ahead: Coronavirus global economic toll continues to mount

Fear remains in the air, and although there are some signs that the number of new infections in Europe is slowing, in the US the number of new cases is continuing to rise. The global number of infections has passed one million during the past week, with the US having roughly a quarter of the cases. The situation in the country is worsening, and President Trump warned that the next two weeks will be “very very painful”. In the name of social distancing, additional states issued stay-at-home orders, with thirty-eight states currently limiting activity to ‘essential business. Increased physical separation will continue to drastically weigh on activity as the economic decline rapidly mounts.

Data released started to reveal the coronavirus impact on the US economy. Initial jobless claims exceed 6.5mn on Thursday, and the NFP report revealed a loss of more than 700k jobs on Friday, The ISM Manufacturing Index fell into contractionary territory at 49.1, while the Non-Manufacturing Index dipped to 52.5 from 57.3 in the month prior. There are increased fears that the sheer scale of the short-term downturn in the economy would overwhelm monetary and fiscal policy support measures and push the US towards depression conditions. The dollar gained net support as risk aversion declined further with renewed demand for the US currency amid fresh demands for cash.

Data released from Europe were not any better, The Eurozone Markit manufacturing and services PMI were revised lower to 44.5 and 26.4 in March, respectively. In the United Kingdom, manufacturing also contracted in March. The final Markit manufacturing and services PMI were revised also lower to 47.8 from 48.0 and 34.5 from 35.7, respectively, and the employment component declined the most since July 2009.

Data due for release this week are also expected to reveal unprecedented declines. And the US Weekly jobless claims due for release on Thursday is expected to grab attention as it did in the past couple of weeks, and another disappointing print could see the dollar climb as stocks sell off. Other forthcoming economic highlights include:


Monday, April 6, 2020:

  • UK Construction PMI (Mar) (08:30 GMT)              

Tuesday, April 7, 2020:

  • RBA Interest Rate Decision (Apr) (04:30 GMT)
  • RBA Rate Statement (04:30 GMT)                                                             
  • US JOLTs Job Openings (Feb) (14:00 GMT)
  • Canada Ivey PMI (Mar) (14:00 GMT)      

Wednesday, April 8, 2020:

  • Crude Oil Inventories (14:30 GMT)          
  • FOMC Meeting Minutes (18:00 GMT)                                

Thursday, April 9, 2020:

  • UK GDP (MoM) (06:00 GMT)
  • UK GDP (YoY) (06:00 GMT) 
  • UK Manufacturing Production (MoM) (Feb) (06:00 GMT)
  • UK Monthly GDP 3M/3M Change (06:00 GMT)
  • ECB Publishes Account of Monetary Policy Meeting (11:30 GMT)                                                               
  • US Initial Jobless Claims (12:30 GMT)
  • US PPI (MoM) (Mar) (12:30 GMT)
  • Canada Employment Change (12:30 GMT)

Friday, April 10, 2020:

  • US Core CPI (MoM) (Mar) (12:30 GMT)
  • US, UK, Australia, Canada, New-Zealand banks will be closed for Good Friday


Last Thursday, oil prices rebounded aggressively after president Trump tweeted that Russia and Saudi Arabia are about to slash output. And although the tow parties didn’t reach any clear agreement yet, there is hopes that they will be able to resolve their differences as the Saudis have called for an OPEC+ meeting, which is expected to take place on Monday. That meeting is expected to grab focus since investors will want to see whether the organisation will agree to increase production cuts.



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