The Week Ahead [18 – 22 May 2020] – UnumCapital
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The Week Ahead [18 – 22 May 2020]

The Week Ahead [18 – 22 May 2020]

(via: TradingEconomics)

Minutes from the Federal Reserve, ECB and RBA will be in the spotlight next week, while central banks in China, Turkey, Indonesia, Thailand and South Africa will be deciding on interest rates. On the economic data front, flash PMI surveys for the US, UK, Eurozone, Japan and Australia will provide an insight into whether these economies recovered from April’s historical contractions as several countries emerged from coronavirus-related lockdowns. Other figures to follow include US housing data; UK jobs report, inflation and retail trade data; Eurozone consumer morale; Japan Q1 GDP, inflation and trade balance.

In the US, investor focus turns to Federal Reserve Chair Jerome Powell’s testimony before the Senate on Tuesday and the FOMC minutes due Wednesday on hopes they might clarify policymakers’ views on the monetary policy path as the coronavirus crisis hits activity and jobs. Powell warned last week of a recession worse than any since World War Two, and said that further monetary and fiscal stimulus may be required to support the struggling economy, but dismissed speculation about negative interest rates. On the economic data front, notable publications are flash Markit PMIs, housing starts and building permits, existing home sales, Philadelphia Fed Manufacturing Index and NAHB Housing Market Index.

Elsewhere in America, key economic data to follow include Canada inflation rate, retail trade and new house prices, Brazil business confidence and Chile first-quarter GDP figures.

Meanwhile, it is a particularly busy week ahead on the UK economic calendar, with flash Markit PMIs expected to show the country’s private sector remained deep in contraction territory in May. In addition, the latest jobs report is expected to show unemployment rate at the highest level since the three months to December 2017 as the coronavirus pandemic forced many businesses to close in the second half of March; while retail sales are seen falling at a record pace during April. Investors will also await inflation data, CBI factory orders, public sector net borrowing and first-quarter labor productivity.

Elsewhere in Europe, the ECB account of April’s policy meeting will be keenly watched, alongside flash Markit PMI figures for the Eurozone, Germany and France. The bloc’s private sector activity is seen contracting at a sharp rate in May, after an historical slump during April, as economies across the region began to gradually lift coronavirus-related lockdown measures. Other key economic data include Eurozone flash consumer confidence, construction output and current account; Germany investor morale; Spain foreign trade and factory orders; and Turkey business and consumer morale. The central bank of Turkey will be deciding on interest rates on Thursday.

The People’s Bank of China will provide an update on its new loan prime rate (LPR) on Wednesday, which was set at 3.85 percent on April 20th as the economy continues to battle the coronavirus crisis. On the economic data front, all eyes will be on April’s house price index. In Japan, preliminary GDP figures will probably show the economy entered a recession in the first three months of the year, while the Jibun Bank flash PMIs for May are likely to remain weak as the country extended its lockdown until the end of the month. Other key data include inflation data, trade balance, machinery orders and the final reading of industrial production.

The Reserve Bank of Australia will publish its monetary policy meeting minutes. Investors will also turn their attention to the CommBank flash PMIs for May as the country started easing lockdown restrictions in some states.

Other highlights for the Asia-Pacific region include: Thailand Q1 GDP and trade balance; Taiwan export orders, industrial output and retail sales; Hong Kong unemployment and inflation; Singapore non-oil exports; Malaysia inflation rate; and New Zealand first-quarter retail sales. Central banks in Thailand and Indonesia will decide on interest rates, with widespread expectations of rate cuts.

Elsewhere, the South Africa Reserve Bank is seen slashing interest rates by another 50bps when it meets on Thursday.

Lester Davids

Lester joined Unum Capital in July 2016 and is a Trading Desk Analyst focusing on local (JSE) and global multi-asset class technical strategy and research which includes idea generation.

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