As the impact of COVID-19 continues to bite harder, the People’ Bank of China cut the interest rate on its medium-term facility earlier this week in a bid to ease the pains of the deadly outbreak on businesses. The virus has already killed more than 2,000 people with over 70,000 people infected within China with Australia reporting 17 cases, Iran 18, Germany 16, France 12, Canada 9 among other nations.
Economies around the world are faced with significant risks as travel and work restrictions are affecting trades between China and her major trade partners.
G20 members are meeting this weekend in Riyadh, Saudi Arabia for the G20 meetings. It is the meeting of 20 industrialized nations where a range of global economic issues are discussed and it is expected that the major topic for discussion this time will be the impact of COVID-19 and the way forward for nations of the world.
With this in mind, let's have a look at events that will further impact the direction of the market next week.
JPY: Banks in Japan will be closed in observance of the Emperor's Birthday.
EUR: Information and Forschung Institute for Economic Research will release the German Ifo Business Climate by 10 am. This data missed forecast at the last release and has failed to beat forecast in 3 of the last 5 releases. With data emanating from Germany recently depicting a slowing economy, it is imperative to pay attention to this data as it provides more insight into the economic health of the Bloc’ powerhouse.
GBP: Andy Haldane, the Chief Economist of the Bank of England and also a Member of the Monetary Policy Committee of the Bank is scheduled to deliver a speech titled "The Wealth, Health, and Happiness of Nations", in London by 7:30 PM. Andy has been a voting member of the Bank since 2014 and has just about 4 months left on his current term. His wealth of experience will be required to steady the ship of the Bank post-Brexit. The Cable has not been stable in recent time and any sight of Hawkishness in his speech will support the Queen’s currency.
USD: The Conference Board Incorporation will release the CB Consumer Confidence by 4 PM. The US economy seems lightly affected by CORVID-19 as the Greenback as hold sway over a basket of major currencies. A positive Confidence data will further boost the already strengthened Greenback.
OIL: Crude Oil Inventories will be released by the Energy Information Administration at 4:30 PM. The slowdown in global economies is affecting demand for Crude Oil in the face of the deadly COVID-19. The data supported Oil at the last release as only 0.4 Million Barrels of Crude Oil are held in inventory by commercial firms as against 3.3 Million predicted by economists. Oil has benefitted from the 5.3% fall in production from India in recent times but the reluctance of Russia to support a further cut to the tune of 600,000 barrels per day is weighing on the commodity in the face of falling demand for Oil.
NZD: ANZ Business Confidence is scheduled to be released by ANZ Bank New Zealand Limited at 1 am. Health practitioners in New Zealand are fearful that the country may be hit with Covid-19 and winter flu season thereby stretching health services and hospitals to breaking point. Health experts have advised New Zealand to put in place better measures than just reliance on travel bans. The data has not shown a lot of optimism in the New Zealand economy in recent times but has been better than forecast in the last three releases.
AUD: Private Capital Expenditure q/q will be released by the Australian Bureau of Statistics. It measures the change in the total inflation-adjusted value of new capital expenditures made by private businesses in Australia. This data fell short of expectations in 4 out of the last 5 releases and is not likely to come out better this time around owing to the impact of the deadly coronavirus and the close tie of the country with China.
CAD: The strength of the commodity supported Loonie will be determined when the Current Account is released by Statistics Canada. This data is directly linked to currency demand and will provide insight as to the state of the Canadian economy in the face of dropping Oil prices and the impact of Coronavirus.
USD: Core Durable Goods Orders m/m, Durable Goods Orders m/m, Prelim GDP q/q and Unemployment Claims will be released by 2:30 pm. The Core Durable goods order is more important because it is believed to be a better gauge of trends in purchase orders as volatile goods are excluded.
Larry Kudlow, White House economic adviser had predicted that the outbreak of coronavirus in China could knock two to three-tenths of a percent off the US GDP in the first quarter of 2020. The Expected GDP data is for the 4th Quarter of last year when the US economy enjoyed some robust growth and will likely come out better than forecast.
EUR: Eurostat will release the CPI Flash Estimate y/y by 11 am. This comes a bit earlier than the final CPI data and still provides an insight into the inflation level in the Eurozone. European Central Bank has had an inflation target of 2% to consider taking more aggressive decisions but the inflation rate in the 13 member nations has consistently come out below the Bank’s target.
CAD: Gross Domestic Product (GDP m/m) will be released by 2:30 pm. The data measures the change in the inflation-adjusted value of all goods and services produced by the economy. A positive GDP data will lend some strength to the Loonie.
* Time is GMT+1
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