The global economy has been ravaged by the CORVID-19 virus, and investors are braced for contraction in China’s GDP and U.S. retail sales. As well, analysts are projecting dismal employment data out of Australia and the United States.
Canadian employment numbers were a disaster last week. The economy lost over 1.01 million jobs in March, as the shutdown of much of the economy caused mass layoffs. This was much higher than the forecast for a decline of 427 thousand. The unemployment rate jumped to 7.8%, up sharply from 5.6%. In the U.K., Final GDP for Q4 came in at 0.0%, confirming the initial reading. The ECB minutes from the March meeting took note of the turmoil caused by the Corvid-19 outbreak and stated that “the risks surrounding the euro area growth outlook were clearly on the downside”. As expected, the RBA held the cash rate at 0.25 percent at its regularly scheduled meeting.
In the U.S., unemployment claims smashed above the 6-million level for a second straight week. The indicator rose to 6.60 million last week, higher than the estimate of 5.0 million. The week ended on a sour note, as consumer inflation declined by 0.4% in March, the first decline since December 2018. Core CPI fell by 0.1%, after a gain of 0.2% a month earlier.
- U.S. Retail Sales Reports: Wednesday, 12:30. Analysts are bracing for dismal releases in March. The headline reading is expected to fall by 8.0%, while the core figure is projected to decline by 5.0 percent. Consumers are holding tight to their purse strings in this time of uncertainty, and consumer spending is expected to have fallen sharply.
- Bank of Canada Rate Decision: Wednesday, 14:00. The BoC made another rate cut at an unscheduled emergency cut. The bank slashed rates from 0.75% to 0.25%, as policymakers try to stabilize the economy which has been hit hard by the Corvid-19 outbreak. The BoC is expected to maintain rates at the upcoming meeting.
- German Final CPI: Thursday, 6:00. The initial March reading for CPI came in at 0.1%, edging above the estimate of 0.0%. The final reading is expected to conform to this figure.
- Canadian ADP Non-Farm Employment Change: Thursday, 12:30. The economy created 7.2 thousand in February, down from 25.9 thousand a month earlier. We will now receive the March data.
- Australian Employment Data: Thursday, 1:30. The economy has registered four successive gains in jobs, including a reading of 26.7 thousand in February. However, the estimate for March stands at -30 thousand. The unemployment rate dropped to 5.1% in February, down from 5.3%. Analysts are projecting that unemployment will jump to 5.4% in March.
- U.S. Unemployment Claims: Thursday, 12:30. Jobless claims have crossed above the 6-million level for two straight weeks, and the forecast remains gloomy, with an estimate of 5.0 million for the upcoming release.
- Chinese GDP: Friday, 2:00. China’s economy posted a second straight gain of 6.0% in Q4. Investors are expecting a disastrous first quarter due to the CORVID-19 outbreak, with a forecast of -6.0%.
- Eurozone Inflation: Friday, 9:00. In the initial readings, the headline figure for March came in at 0.7%, while the core figure showed a gain of 1.0%. The final readings are expected to conform to the initial readings.
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