The CORVID-19 outbreak has paralyzed the global economy and led to sharp volatility in the currency markets. In the upcoming week, we’ll get a look at manufacturing PMIs in China and the U.S, British GDP as well as U.S. nonfarm payrolls.
The British economy was stagnant in the fourth quarter. Final GDP for Q4 came in at 0.0%, confirming the initial reading. In Australia, the RBA minutes showed that policymakers were not optimistic about economic conditions, but that they “had no appetite for negative interest rates”. Last month, the RBA cut rates to 0.25%. Canada’s GDP slowed to a weak 0.1% in February, matching the estimate. This was down from 0.3% a month earlier.
In the U.S. employment numbers were dismal, as the COVID-19 virus has paralyzed much of the U.S. economy. Jobless claims soared to 6.6 million, more than double to 3.2 million a week earlier. Nonfarm payrolls fell by 701 thousand, much worse than the estimate of -100 thousand. The unemployment rate shot up to 4.4% up from 3.5 percent. The estimate stood at 3.8 percent.
- RBA Rate Decision: Tuesday, 4:30. The RBA cut the cash rate from 0.50% to 0.25% on March 19, at an emergency unscheduled meeting. RBA Governor Philip Lowe said that the move was aimed at “reducing the economic and financial disruption resulting from the virus”. The bank is expected to maintain the cash rate at 0.25%, so investors will be keeping a close eye on the tone of the rate statement.
- British GDP: Thursday, 8:30. The monthly GDP release came in at 0.0% in January, pointing to stagnation. The February estimate is a weak gain of 0.1%.
- U.S. Unemployment Claims: Thursday, 12:30. Jobless claims have been in the stratosphere in recent weeks, as the CORVID-19 as brought much of the U.S. economy to a grinding halt. Unemployment claims soared to 6.6 million last week, much higher than the estimate of 3.6. million. The estimate for this week is also staggering, at 5.0 million.
- ECB Monetary Policy Meeting Accounts: Thursday, 11:30. At the March 12 meeting, the ECB opted not to follow the Federal Reserve and Bank of England and did not lower its main deposit rate, which is at -0.5%. The bank also expanded its asset purchase program by 120 billion euros. Investors will be keen to read the details of the meeting provided by the minutes.
- U.S. Inflation: Friday, 15:30. Consumer inflation remains low in the United States and will likely fall due to the severe economic impact of the CORVID-19 virus. The headline figure has come in at 0.1% for two straight months, and the upcoming
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- USD/CAD forecast – Canadian dollar predictions
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