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Waiting for the next historic number

Global economy week ahead.
Filings for US unemployment benefits seen in millions for third straight week. Image: Bloomberg

As the true economic impact of the coronavirus pandemic becomes clear, economists seeing unprecedented data releases on an almost daily basis are gearing up for even worse to come.
In the US and the rest of the world, reports showing historic spikes in joblessness and declines in activity have been accompanied with warnings that even more concerning data will follow once the full impact of the lockdown in much of the world becomes clear.

This week the focus will once again rest on the US labor markets, and the weekly release of jobless claims data that has jumped by almost 10 million across the last two reports. The Federal Reserve and the European Central Bank are also both scheduled to release minutes which may include details of their thought process as they injected waves of emergency stimulus into the economy.

Here’s what happened last week and below is our wrap of what else is coming up in the world economy.

Asia

Central banks in Australia and South Korea meet, though after their emergency actions in mid March, it’ll be a quieter affair. On the data front, China consumer and factory prices for March will be scrutinised for any signs of how the coronavirus is impacting supply chains and demand.

Europe, Middle East and Africa

After dismal PMIs last week, the Bank of France’s business sentiment index on Wednesday is predicted to fall to the lowest since the financial crisis. Meanwhile, industrial production numbers for Germany, France and Italy for February will provide pre-pandemic data and the U.K. is also due to release growth figures from February, which will give a sense of the strength of the economy going into the lockdown.

The Swiss National Bank said last month it was stepping up currency interventions to stem the franc’s advance and data on Tuesday will provide insight into how much the it spent to keep that pledge.

Israel’s central bank may cut its benchmark interest rate to 0.1% from 0.25% on Monday, its latest move to respond to the economic havoc wreaked by the coronavirus pandemic, after earlier committing to purchasing 50 billion shekels ($13.8 billion) of government bonds from the secondary market. Serbia and Poland also have rate decisions and Czech lawmakers are expected to approve a new law on the central bank, which will give it an option to start asset purchases.

In South Africa, Wednesday’s data will probably show business confidence deteriorated in March, a picture that’s likely to get worse due to the nationwide lockdown in April. Car sales data from Russia on Monday will be one of the first indications of how hard consumers there have been hit by the virus fallout and the ruble’s crash.

US and Canada

Expect investors to focus Wednesday on the release by the Fed of meeting minutes — which are expected to include details on their decisions to slash interest rates and support the economy. On Thursday, eyes will turn to the latest data on jobless claims, which have surged to record levels as the public health crisis intensified.

Meanwhile, Canada’s jobs report on Thursday will will be the first data point on how deeply the pandemic has impacted the nation’s labor market.

Latin America

Mexico has so far been Latin America’s odd man out compared to the spending packages other governments are rolling out against the coronavirus pandemic. Adamantly opposed to any response that adds to government debt, President Andres Manuel Lopez Obrador on Sunday is slated to release his plan to address the crisis. If Lopez Obrador keeps a lid on fiscal stimulus, data out Tuesday showing inflation well within the target range and slowing would give the central bank room for additional monetary stimulus.

© 2020 Bloomberg

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