The U.S. Federal Reserve Bank had an emergency rate cut of 50 basis points on Tuesday citing the impact of Coronavirus and the general slow down in the economy. Investors were somewhat disappointed by the outcome of the G7 meeting as statements made available after the meeting failed to highlight steps put in place by the elite nations to combat the current economic slowdown. Finance Ministers from the G7 nations are calling for fresh spending by government as well as a coordinated interest rate cut.  COVID-19 emerged in China late last year and has touched base with over 60 countries claiming over 3000 lives. 

Reserve bank of Australia led the way in the co-ordinated rate cut, as weak data from China is weighing heavily on the Chinese economy dependent Aussie. China is Australia’s major trade partner as transactions in excess of US$89.2 billion (accounting for over 30% of her external trade activities) takes place between them. Bank of Canada also reduced overnight rate and other Central Banks are expected to follow suit in the coming days. 

With this in mind, let's have a look at events that will further impact the direction of the market next week.

Monday 9th March 

Activities and updates from the weekend are envisaged to dominate sentiment as there is no expected high-impact economic data outside of the trade data expected from China. 

 Tuesday 10th March 

AUD: NAB Business Confidence will be released by National Australia Bank Limited. The data will show the broader impact of the bush fire on the Australian economy and the early effect of the coronavirus on the economy that is highly dependent on China for trade relations.

NZD: Reserve Bank of New Zealand Governor Adrian Orr is expected to speak about the high-level principles governing the use of unconventional monetary policy tools, in Wellington on Tuesday by 2 am. He is expected to provide more insight into any of the unconventional tools the bank has been using in recent times to achieve her set objective and the plan of the bank in the usage of these tools to cope with the growing impact of COVID-19 and its attendant economic impact. 

AUD: Reserve Bank of Australia Deputy Governor Guy Debelle is scheduled to speak at the Australian Financial Review Business Summit, in Sydney on Tuesday by 11 PM. As a key member of the Monetary Policy Committee of the bank, he has been a part of the country’s monetary policy and will be able to provide answers to questions that will be raised by participants.

Wednesday 11th  March 

GBP: GDP m/m and Manufacturing Production m/m will be released by 10:30 am. Britain is still grappling with their new status as a non-member of the EU and then come the COVID-19. 

GBP: Annual Budget Release by 12:30 PM. The Chancellor of the Exchequer will present his Budget to Parliament. Spending by the government has a significant impact on the economy. When government spending increases, it is expected to also boost job creation and strengthen the country’s fiscal position.

USD: CPI m/m and Core CPI m/m by 1:30 PM. This crucial inflation data will be released by the Bureau of labour statistics. FOMC members pay more attention to the Core data as it avoids the consideration of volatile goods such as food and energy. 

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. OPEC members at the 5th March meeting decided that the 1.5 million barrel per day cut should last till the end of the year, but the decision has failed to support Oil meaning more drastic steps are required by the organization to arrest this free fall. The data this week might have little or no impact on the commodity as the deadly coronavirus continues to rattle the global economy.

Thursday 12th March

USD: Core PPI m/m and PPI m/m by 1:30 PM from the Bureau of Labour Statistics. The two data advanced at the last release showing a surge in The Producer Price Index for final demand.

EUR: Main Refinancing Rate and Monetary Policy Statement. This is the first real test for Christine Lagarde as the head of the European Central Bank. She said earlier this month that the bank is ready to take appropriate and targeted measures, as necessary and commensurate with the underlying risks. Meanwhile, the Euro Group President, Mario Centeno had this week pointed out that the finance ministers withing the Bloc are ready to take further policy action which might include fiscal measures. Will the bank further increase the €20bn a month bond purchase or not? Will the bank cut the rate to the negative territory and spark intense opposition among member nations? The answers to these questions will be made available on Thursday.

EUR: ECB President Christine Lagarde and her Vice Luis de Guindos will have an hour-long Press Conference after the rate statement. They will also respond to questions from the Press and their responses will provide a clearer view as to the reason behind the decision made in the statement. 

Friday 13th March

USD: Prelim UoM Consumer Sentiment will be released by the University of Michigan by 3 PM. Consumer sentiment rose to 101 in February almost at par with the expansionary peak of 101.4 recorded in March 2018. 

* Time is GMT+1