Covid-19 has caused financial destruction across the globe. Although containment rules have begun to ease, economic figures such as GDP and employment remain bleak.
In the UK, GDP fell by 2.0% in the first quarter, the first decrease in three quarters. Analysts had expected a sharp decline of 2.6 percent. Monthly GDP fell by 5.8% in February, but this beat the forecast at -7.9 percent. In Germany, the economy fell by 2.2% in the fourth quarter after a loss of 0.1% in the third quarter. Eurozone GDP also slipped as the reading at second estimate fell by 3.8%, confirming the initial reading. The German CPI accelerated to 0.4% in April, from 0.1% a month earlier. In Australia, the number of jobs was bleak in April. The economy shed 594.3 thousand jobs and unemployment rose to 6.2 percent, up from 5.2% a month earlier.
In the US, inflation went south in April as the economy continued to fluctuate under the weight of the Corvid-19 pandemic. The CPI fell by 0.8%, down from -0.4% a month earlier. Core reading decreased by 0.4%, down from -0.1% in the previous release. Both figures missed their estimates. Unemployment rates continue to fall, dropping to below 3 million last week with a release of 2.98 million. Still, this missed the 2.5 million estimate.
- -RBA meetings Protocol: Tuesday, 1:30 p.m. The RBA minutes provide details of the policy meeting earlier this month. At this meeting, policy makers had a cash rate of 0.25 percent and noted the uncertainty about the outlook for the economy.
- UK Employment Report: Tuesday 6am Despite the mass feature due to Corvid-19, the UK labor market remains relatively unscathed. Wage growth dipped to 2.8% in February, down from 3.1% in the previous release. This marked the lowest gain since August 2018. The decline is expected to continue in March with a forecast of 2.7 percent. In March, unemployment requirements dropped from March 17.3 thousand to 12.1 thousand. Analysts had expected a huge fall of 170 thousand. We will now receive the April data. Unemployment is expected to jump to 4.4 percent, up from 4.0 percent.
- UK Inflation Report: Wednesday 6:00 pm Consumer inflation continues to fall, falling to 1.5% in March. This was down from 1.5% and was the weakest reading in four months. Core numbers fell from 1.7% to 1.6%. In April, the forecast is 0.9% for the headline reading and 1.4% for the core CPI.
- Eurozone inflation: Wednesday 9am Inflation has fallen sharply as the economy of the euro area has been paralyzed by the Covid-19 outbreak. The first reading in April dropped to 0.4% and the final reading is expected to confirm this figure.
- UK Manufacturing PMI: Thursday, 8:30 p.m. The final reading for April came at 32.6, shame on the estimate of 42.0. The first reading for May is expected to drop to 35.1 points. The 50-level separates contraction from expansion.
- UK PMI: Thursday, 8:30 p.m. Markit’s forward indexes for the UK economy culminate with the announcement of the services sector. The country’s largest sector has been in free fall since falling to 13.4 points in April. The initial reading for May is at 20.0 points.
- U.S. unemployment Claims: Thursday, 12:30 p.m. Unemployment has fallen every week, but last week’s figure of 2.98 million shows that the labor market remains seriously disturbed. Another high figure is expected with an estimate of 2.4 million.
- US Manufacturing PMI: Thursday, 1:45 pm. The manufacturing sector continues to point to contraction. Manufacturing PMI came in at 36.1 in April and the initial reading for May stands at 37.5 points.
- Eurozone PMIs: Friday 7:15 in France, 7:30 in Germany and 8:00 for the entire euro zone. The service sector has been in free fall with reported sharp contractions across the euro zone in April. The German PMI came in at 16.2, the euro area release was 12.0 and the French reading stood at 10.2. The first estimates for May are 26.2 for Germany, 23.9 for the euro zone and 28.8 for France. The manufacturing sector is in better shape but is still showing contraction, with measurements well below the 50 level separating contraction from expansion. The German PMI came in at 34.5, the euro zone at 33.4 and the French release at 31.5. The forecast for the initial readings for May is 39.0 for Germany, 38.0 for the euro area and 35.6 for France.