Analysts are projecting dismal economic data for March, as the Covid-19 virus spread from China and hammered major economies at that time. Key events such as U.S. and eurozone GDP are expected to point to sharp contractions.
In the UK, the Services PMI plunged in March, dropping to 12.3 points, down from 35.7 a month earlier. On the inflation front, Eurozone CPI came in at 0.7%, while the core reading showed a gain of 1.0 percent. This confirmed the initial readings.
In the U.S., jobless claims dropped to 4.4 million, down from 5.5 million a week earlier. In the past five weeks, new jobless claims have totaled a staggering 26 million, as the Covid-19 crisis has shut down much of the U.S. economy. There was more bad news from March durable goods orders, which plunged by 14.4%, its first decline in four months. The core reading declined by 0.2%, after a decline of 0.6%. The UoM Consumer Sentiment slumped to 71.8, down sharply from 89.1 a month earlier. Still, this beat the estimate of 67.8 points.
- German Preliminary CPI: Wednesday, All Day. Inflation remains very low in the eurozone’s number one economy. CPI came in at just 0.1% in the final reading for March, confirming the initial release. CPI is expected to dip to 0.0% in the upcoming release.
- U.S. Advance GDP: Wednesday, 12:30. The third read for GDP in Q4 of 2019 came in at 2.1%, but analysts are projecting a sharp decline in Q1 of 2020, with an estimate of -3.9 percent.
- FOMC Rate Decision: Wednesday, 18:00. The Fed has slashed interest rates in recent months in order to stabilize the economy. No change is expected in the benchmark rate at the upcoming meeting, but the rate statement will be under scrutiny, as investors will be looking for clues as to future moves by the Fed.
- U.S. Unemployment Claims: Thursday, 12:30. New jobless claims have amounted to some 26 million in the past five weeks, but there is a silver lining, as the indicator has been declining. Last week, the indicator dropped to 3.5 million, down from 4.4 million a week earlier.
- French Flash GDP: Thursday, 5:30. The euro zone’s second-largest economy contracted by 0.1% in the fourth quarter. Economic conditions have deteriorated significantly due to the Covid-19 outbreak and analysts are bracing for a sharp decline of 4.0% in Q1 GDP.
- Eurozone Flash GDP: Thursday, 9:00. The initial read of GDP tends to have the most significant impact, even though it does not include data from Germany. Back in Q4, the third read confirmed a growth rate of 0.1%. For Q1, the forecast stands at -3.7 percent. A decline in this range could send the euro sharply lower.
- Eurozone Inflation: Thursday, 9:00. CPI came in at 0.7% in the final March reading, as inflation remains well below the ECB target of around 2 percent. The forecast for the initial April reading stands at just 0.1%. The core reading showed a gain of 1.0% in March and the April forecast stands at 0.7 percent.
- ECB Rate Decision: Thursday, 11:45. The ECB is scrambling to deal with the turmoil in the financial markets due to the corona crisis. The bank has changed some rules in order to maintain banks’ access to its ultra-cheap liquidity. The ECB will also publish fresh forecasts for growth and inflation and may downgrade some of the data points.
- Canadian GDP: Thursday, 12:30. Canada releases GDP on a monthly basis. The February read came in at 0.1%, and March is expected in at a flat 0.0%.
- UK Final Manufacturing PMI: Friday, 8:30. The PMI slowed to 47.8 in March, down sharply from 51.7 points. The index is projected to slide to 32.8 in April, which is deep in contraction territory.
- U.S. ISM Manufacturing PMI: Friday, 14:00. The PMI dipped to 49.1 in March, down slightly from 50.1 points. Analysts are braced for a sharp slowdown in April, with an estimate of 36.7 points.
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