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Bob Mason
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On the Macro

It’s a busy week ahead on the economic calendar, with 74 stats to monitor in the week ending 3rd April. In the week prior, 52 stats had been in focus.

For the Dollar:

It’s another busy week ahead for the greenback.

March consumer confidence figures get things going on Tuesday. We expect a marked slide in confidence as consumers grapple with the spread of the coronavirus. With plenty of economic uncertainty and more than 30% slides in the U.S equity markets in the month, at survey time, it’s not going to be good…

The focus will then shift to March private sector PMI numbers and ADP Nonfarm Employment change figures on Wednesday.

The markets preferred ISM Manufacturing PMI for March is also likely to reflect dire sector conditions. ADP nonfarm employment change figures are not going to be any better, the only question being the size of the fall…

On Thursday, the weekly initial jobless claims are in focus ahead of labor market numbers on Friday. With the shutdown continuing in the U.S, another large jump in initial jobless claims is likely.

On Friday, nonfarm payrolls will see a marked decline in March and may well turn out to be the largest on record. The slide in nonfarm payrolls could drive the unemployment rate to beyond 4%. With the focus on the NFP numbers, expect wage growth figures to have a muted impact.

While we can expect plenty of reaction to the NFP numbers, expect the ISM Non-Manufacturing PMI to also draw plenty of attention.

Last week’s initial jobless claims figures have prepared the market for some quite dire NFP numbers…

Other stats that include the housing sector, factory orders, finalized Markit Survey PMIs and trade data will likely be brushed aside.

The Dollar Spot Index ended the week down by 4.33% to 98.365.

For the EUR:

It’s also a busy week ahead on the economic data front.

German unemployment figures for March on Tuesday, along with prelim March inflation figures get the week going. Expect the Eurozone’s annual rate of inflation to have the greatest impact on the inflation front.

The focus will then shift to a busy Wednesday, with Spain and Italy’s March Manufacturing PMIs due out.

Finalized PMIs out of France, Germany, and the Eurozone will also need monitoring for any revisions.

Wrapping up the week are Spanish and Italian March Services PMIs. We will expect the Eurozone’s finalized Composite to also have a material impact.

Italy and Spain’s PMIs will garner plenty of attention with the two most impacted by the virus in the EU.

Throughout the week, we don’t expect February numbers to have much influence. These include German and Eurozone retail sales figures and the Eurozone unemployment rate.

The EUR/USD ended the week up by 4.24% to $1.1141.

For the Pound:

It’s also a relatively busy week ahead on the economic calendar.

Barring material deviation from prelims, however, we would expect 4th quarter GDP numbers on Tuesday to have a muted impact on the Pound.

Finalized Manufacturing and Services PMIs for March that are due out on Wednesday and Friday will influence, however.

Expect March Construction PMI numbers due out on Thursday to also garner some interest.

The Services PMI on Friday will have the greatest impact on the Pound on the data front… Whether it can check the Pound’s recovery remains to be seen, however. Much will depend on how successful the government has been in containing the spread of the coronavirus.

The GBP/USD ended the week down by 7.15% to $1.2460.

For the Loonie:

It’s a relatively quiet week ahead on the economic calendar.

January GDP and February RMPI numbers are due out on Tuesday ahead of February trade data on Thursday.

While we expect February trade data to garner some interest, the markets will be more interested in March numbers.

That leaves crude oil prices and fiscal policy as the key drivers in the week.

On the monetary policy front, we saw the BoC deliver a 2nd emergency rate cut last week, in addition to a bond purchasing program. The BoC should now be in pause mode, particularly with the stats limited to January and February numbers.

The Loonie ended the week up by 2.65% to C$1.3985 against the U.S Dollar.

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Out of Asia

For the Aussie Dollar:

It’s a busy quiet week ahead on the economic calendar.

Private sector credit and new home sales figures for February on Tuesday will reflect have some influence.

We won’t expect a material impact on the Aussie Dollar, however, with the markets prepared for some negativity.

March manufacturing index numbers on Wednesday will garner some interest ahead of February retail sales figures on Friday.

While the retail sales figures are for February, any material slide in sales will spell doom and gloom for the RBA.

With the RBA reliant on household spending, the coronavirus comes at a bad time and will likely hit consumption. Last week’s strong rebound could come under scrutiny should February numbers disappoint.

From elsewhere, China’s March Caixin private sector PMIs will also have an impact on risk appetite in the week…

The Aussie Dollar ended the week up by 6.62% to $0.6168.

For the Kiwi Dollar:

It’s a quiet week ahead on the economic data front. Key stats are limited to March business confidence and February business consent numbers due out on Tuesday.

The focus will be on the consumer confidence numbers and it’s not about whether there will be a rise or fall but by how far the Index tumbles.

Private sector PMIs out of China will be in focus in the week as will updates on the spread of COVID-19.

The Kiwi Dollar ended the week up by 5.88% to $0.6035.

For the Japanese Yen:

It’s a relatively busy week ahead.

February prelim industrial production and retail sales figures due out on Tuesday will influence ahead of Q1 Tankan survey numbers on Wednesday.

Barring a material deviation from prelims, March Manufacturing and Service PMIs will have a muted impact.

It won’t be a surprise that the all-important Tankan indexes take a tumble. The Japanese economy was exposed early, not just to the virus but also to China’s February lockdown.

That ultimately leaves market risk sentiment in focus throughout the week.

The Japanese Yen ended the week up by 2.70% to ¥107.94 against the U.S Dollar.

Out of China

It’s a relatively quiet but influential week ahead on the economic data front.

Key stats include March NBS Private Sector PMIs due out on Tuesday and the market’s preferred Caixin survey figures. The Caixin Manufacturing PMI is due out on Wednesday, the Services PMI due out on Friday.

Any uptick from February’s particularly dire numbers could ease market tension, though we would expect the sector to remain in deep contraction.

Of greater influence in the week will be COVID-19 news updates. A continued slowdown in new cases across the country would also raise hopes of a near-term return to business as usual.

One concern, however, is the recent rise in imported cases and whether that leads to another breakout.

The Chinese Yuan ended the week flat at CNY7.096 against the U.S Dollar.

Geo-Politics

Trade Wars:

With the U.S grappling with the spread of the coronavirus, there’s little interest in trade terms at present. Trump will be concerned that the extended trade war with China won’t lead to an immediate surge in exports to China. Publicly making such statements, however, would likely be considered insensitive and best avoided.

UK Politics:

Not only are the respective chief negotiators, Barnier and David Frost in isolation, but also British Prime Minister Johnson who has also tested positive for COVID-19.

In spite of this, video linked talks are due to take place in the week ahead.

The British Government has insisted that the Brexit timetable should remain unchanged. As March comes to a rapid end, that leaves 3-months for both sides to thrash out a framework.

Johnson has promised to walk away from talks should a framework not be in place by June…

U.S Politics:

The markets will be looking to get an update to the Democratic Primaries schedule, though this will be an afterthought in the week ahead. The Focus remains on the U.S administration’s handling of the coronavirus spread across the U.S. Any slowdown in the pace of contraction and that should favor Trump and the Republicans.

The Coronavirus:

Governments and central banks have made their moves and may well deliver more in the weeks ahead.

For now, we can expect the coronavirus numbers to be a key area of interest for the global financial markets.

Governments who have managed to slow the spread of the virus are likely to see a quicker economic recovery.

Based on the spread, from East to West, however, China and the EU should be first out of the blocks…

Trump will be eager to get ahead of the curve, which could expose the U.S to a risk of a greater spread of the virus.

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