Week ahead – Tougher times ahead?

Key Economic Releases and Events:

Monday, Mar 23th

Start Date (UK) Time (UK) Country Relevance Indicator Name Period
23 Mar 2020 03:00 Thailand Medium Customs-Based Trade Data Feb
23 Mar 2020 05:00 Singapore Low Core CPI YY Feb
23 Mar 2020 05:00 Singapore Medium Consumer Price Index YY Feb
23 Mar 2020 08:30 Hong Kong Low Consumer Price Index Feb
23 Mar 2020 22:00 Australia High Manufacturing PMI Mar
23 Mar 2020 22:00 Australia High Services PMI Mar
23 Mar 2020 22:00 Australia High Composite PMI Mar

 Tuesday, Mar 24th

24 Mar 2020 00:30 Japan High Jibun Bank Mfg PMI Flash Mar
24 Mar 2020 08:15 France High Markit Mfg Flash PMI Mar
24 Mar 2020 08:15 France High Markit Serv Flash PMI Mar
24 Mar 2020 08:15 France High Markit Comp Flash PMI Mar
24 Mar 2020 08:30 Germany High Markit Mfg Flash PMI Mar
24 Mar 2020 08:30 Germany High Markit Service Flash PMI Mar
24 Mar 2020 08:30 Germany High Markit Comp Flash PMI Mar
24 Mar 2020 09:00 Euro Zone High Markit Mfg Flash PMI Mar
24 Mar 2020 09:00 Euro Zone High Markit Serv Flash PMI Mar
24 Mar 2020 09:00 Euro Zone High Markit Comp Flash PMI Mar
24 Mar 2020 09:30 United Kingdom High Flash Composite PMI Mar
24 Mar 2020 09:30 United Kingdom High Flash Manufacturing PMI Mar
24 Mar 2020 09:30 United Kingdom High Flash Services PMI Mar
24 Mar 2020 13:00 Hungary High Hungary Base Rate Mar
24 Mar 2020 13:00 Hungary High O/N Deposit Rate Mar
24 Mar 2020 13:45 United States High Markit Comp Flash PMI Mar
24 Mar 2020 13:45 United States High Markit Mfg PMI Flash Mar
24 Mar 2020 13:45 United States High Markit Svcs PMI Flash Mar
24 Mar 2020 21:30 United States Not Rated API weekly crude stocks 16 Mar, w/e
24 Mar 2020 21:45 New Zealand Medium Trade Balance Feb

 Wednesday, Mar 25th

25 Mar 2020 04:00 Thailand Medium Manufacturing Prod YY Feb
25 Mar 2020 07:05 Thailand High 1-Day Repo Rate 25 Mar
25 Mar 2020 09:00 Germany High Ifo Business Climate New Mar
25 Mar 2020 09:30 United Kingdom Low Core CPI YY Feb
25 Mar 2020 09:30 United Kingdom High CPI YY Feb
25 Mar 2020 12:00 Mexico Low Retail Sales YY Jan
25 Mar 2020 12:00 Mexico Low Retail Sales MM Jan
25 Mar 2020 12:30 United States High Durable Goods Feb
25 Mar 2020 12:30 United States Medium Durables Ex-Transport Feb
25 Mar 2020 14:30 United States Not Rated EIA Weekly Crude Stocks 20 Mar, w/e
25 Mar 2020 19:00 Argentina Medium GDP YY Q4

 Thursday, Mar 26th

26 Mar 2020 05:00 Singapore Medium Manufacturing Output MM Feb
26 Mar 2020 05:00 Singapore Medium Manufacturing Output YY Feb
26 Mar 2020 07:00 Germany Medium GfK Consumer Sentiment Apr
26 Mar 2020 08:00 Sweden Medium Overall Sentiment Mar
26 Mar 2020 08:00 Sweden Medium Consumer Confidence SA Mar
26 Mar 2020 09:30 United Kingdom High Retail Sales MM Feb
26 Mar 2020 09:30 United Kingdom High Retail Sales Ex-Fuel MM Feb
26 Mar 2020 09:30 United Kingdom High Retail Sales YY Feb
26 Mar 2020 09:30 United Kingdom Medium Retail Sales Ex-Fuel YY Feb
26 Mar 2020 12:00 United Kingdom High BOE Bank Rate Mar
26 Mar 2020 12:00 United Kingdom Low GB BOE QE Gilts Mar
26 Mar 2020 12:00 United Kingdom High GB BOE QE Corp Mar
26 Mar 2020 12:00 United Kingdom Medium BOE MPC Vote Hike Mar
26 Mar 2020 12:00 United Kingdom Medium BOE MPC Vote Unchanged Mar
26 Mar 2020 12:00 United Kingdom Medium BOE MPC Vote Cut Mar
26 Mar 2020 12:00 Mexico Low Jobless Rate Feb
26 Mar 2020 12:00 Czech Republic High CNB Repo Rate 26 Mar
26 Mar 2020 12:30 United States High GDP Final Q4
26 Mar 2020 12:30 United States High Initial Jobless Claims 21 Mar, w/e
26 Mar 2020 19:00 Mexico High Interest Rate Mar
26 Mar 2020 19:00 Argentina Medium Trade Balance Feb
26 Mar 2020 19:00 Argentina Low Unemployment Rate Q4
26 Mar 2020 23:30 Japan High CPI Tokyo Ex fresh food YY Mar
26 Mar 2020 23:30 Japan High CPI, Overall Tokyo Mar

 Friday, Mar 27th  

27 Mar 2020 08:00 Hungary Low Unemployment Rate 3M Feb
27 Mar 2020 08:30 Sweden Medium Retail Sales MM Feb
27 Mar 2020 08:30 Sweden Medium Retail Sales YY Feb
27 Mar 2020 12:30 United States Medium Personal Income MM Feb
27 Mar 2020 12:30 United States Medium Personal Consump Real MM Feb
27 Mar 2020 12:30 United States High Consumption, Adjusted MM Feb
27 Mar 2020 12:30 United States Medium Core PCE Price Index MM Feb
27 Mar 2020 12:30 United States Low Core PCE Price Index YY Feb
27 Mar 2020 12:30 United States Low PCE Price Index MM Feb
27 Mar 2020 12:30 United States Low PCE Price Index YY Feb
27 Mar 2020 14:00 United States High U Mich Sentiment Final Mar

Country

UK

The UK is not taking the coronavirus lightly, despite initial criticism against the government to the contrary. The number of cases now stands at 3,983 with 177 deaths, a significant acceleration on a day earlier. Much darker days lie ahead but both the government and Bank of England have announced huge fiscal and monetary easing packages and made clear that they will continue to add to them as the situation develops.

The pound sold off heavily this week, despite these efforts, including an incredibly volatile day on Friday in which the currency gave up most of its earlier gains. It’s not likely to get easier for the country or anything associated with it. The BoE meets next week but the way they’re easing at unscheduled meetings, I’m not sure that’s even particularly important any more.

Eurozone

The ECB disappointed the markets by not cutting interest rates at the meeting last week but responded with a massive surprise QE program on Wednesday that made up for it. The temporary bond purchases, until the end of the year, named Pandemic Emergency Purchase Program, took pressure off the rising yields across Europe. Central banks aren’t taking this lightly so we can probably expect more unscheduled announcements for weeks to come.

US

The data is about to get ugly for the US economy.  It is a worrying time for many Americans and the next jobless claims release will be the opening act to a string of terrible economic data releases.  Filings for unemployment benefits are going to skyrocket well above their record high that occurred during Hurricane Sandy in 2012.  With half of US workers receiving hourly pay, filings for restaurant, retail, hotel, and travel businesses could see well over a million claims filed for the week ending March 21st. Expectations are all over the place with one analyst eyeing 3-million jobless claims.

The Fed has been very active in delivering stimulus and so has the government.  Washington has already passed two phases of virus relief with the big $1.3 trillion economic stimulus potentially set to get voted on early in the week.

The lockdown efforts will likely intensify in the US and all eyes will be on how quickly healthcare capacity is reached.  Any slowing in the spread of the coronavirus could prove to be supportive for risk appetite, but all early signs suggest that will probably not be the case.

US Politics

The Democrats have quickly settled on former-VP Joe Biden as the nominee, technically not official, but pretty much guaranteed.  Biden will lose a lot of momentum as social distancing will prevent him from holding rallies.  US politics should take a backseat for a couple months until Washington is able to do everything they can for providing support to those impacted by the coronavirus.

China

Industrial Profits due next Friday. Investors pricing a recovery China for now as new coronavirus cases are plummeting to zero. Faces an external demand shock from coronavirus.

A resurgence of coronavirus sees double dip. Authorities tightly managing stock market and currency volatility. Stocks could suddenly collapse if authorities step aside.

Hong Kong

Economy mired in a deep recession due to coronavirus slowdown. On the plus side, protests have subsided to almost nil. No significant data or events next week. Cathay Pacific slashes capacity by 96%.

Covid-19 could weigh on the economy leaving national champions like Cathay Pacific bleeding. Sentiment on equity market very fragile.

India

A huge winner from oil price collapse will help the RBI stagflation fight. No data of significance. Credit markets under strain post the RBI takeover of Yes Bank

A sudden spurt of coronavirus cases could overwhelm health system. INR and Nifty as risk of declines as investors flee. Credit markets could become very tight as Yes Bank failure delivers another blow to the banking system. Cap for Yes Bank withdrawals ends next week. A bank run has the potential for domino in the financial sector.

Australia

Panic buying of consumer staples as coronavirus cases increase. The slowdown in the domestic economy as borders are shut. RBA cut rates and announced a massive QE programme. Will do what it takes. AUD crushed, hitting multi-decade lows. Massive stock market volatility. Members told to decrease the number of trades by 25%.

There is a real risk of heavy intervention by the RBA. The stock market may introduce trading curbs and/or shorten trading hours.

New Zealand

No significant data. Containment measures appear to be working well with low number of cases. Like AUD, NZD has been heavily sold, hits GFC low.  Remains vulnerable to further resource price drops. RBNZ cut rates to 0.25% and preparing other measures if needed. No sign of housing market stress or job losses.

Spike in coronavirus cases will put pressure on NZ stocks. More likely is a massive short squeeze as NZD is hugely oversold.

Japan

Doubts persist over true numbers of coronavirus cases. BoJ no cut but increased QE. Fiscal stimulus package from the finance ministry is still imminent. No data of note. High risk of Olympics cancellation, blow to the economy. Nikkei refusing to rally when rest of Asia and the US do is a bad sign.

Doubts persist over Japans true coronavirus numbers. Risk of Olympic cancellation. Delayed response from the government on the fiscal front. Any of these factors can send Japan equities much lower, quickly.

Market

USD

The dollar has come back into favour and rapidly, despite a slew of measures from the Federal Reserve to support the economy and ensure the plumbing of the financial markets continues to function. The dollar has been soaring to trade at its highest level since the start of 2017. Expect to see a lot more focus on emerging markets as a result, particularly those with large dollar-denominated debt and current account deficits.

Oil

It’s been a wild ride for oil and today was no different. Early gains were short-lived and heavy losses followed once again. It’s the perfect storm for oil which is facing a global recession and an oil price war. The latter can be avoided but no side is showing any indication that it’s going to blink first.

Gold

Gold prices appear to be stabilizing but its role in the markets right now is anyone’s guess. Today’s it’s rebounded alongside the improvement in risk appetite, while falling for much of the week as central banks around the world threw the kitchen sink at the coronavirus. Their efforts are not in vain but we’re not seeing the surge in demand for gold that we’ve seen in the past when the market is flooded with liquidity. I feel there may be a lag effect, with investors still liquidating gold positions to fill holes elsewhere but only time will tell.

Bitcoin

No one will be more relieved than crypto fans about the rebound over the last 48 hours. After falling 63% from mid-February to mid-March, it’s now rallied more than 70% in less than a week to trade close to $7,000. It will be difficult to maintain these gains though as I don’t think the worst in the markets is behind us and cryptos have clearly been among the victims. Worse days may still lie ahead.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Craig Erlam

Craig Erlam

Senior Market Analyst - UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a Market Analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and BNN. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam