Events to Look Out for Next Week


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By: Andria Pichidi

  • Gross Domestic Product (JPY) – The Japanese Q1 prel. GDP is anticipated to show a relatively small loss to -4.6% y/y and -1.2% q/q, from the -7.1% and -1.8% respectively, as the fallout from Covid-19 has clearly increased recession risks.
  • Eurogroup Meeting

Tuesday – 19 May 2020

  • RBA Minutes (AUD, GMT 01:30) – The RBA minutes should provide guidance as to whether the RBA members are actually prepared for further easing. The bank in its last meeting kept main policy tools unchanged, and at the same time the RBA broadened the pool of collateral in daily market ops to include ones issued by non-banks with IG ratings. At the same time the bank said it is prepared to scale government bond purchases back up again if necessary.
  • Average Earnings (GBP, GMT 06:00) – Average Earnings excluding bonus for May are expected to remain unchanged. The ILO unemployment rate is expected to have declined slightly at 3.9% (3M) from 4.0%.
  • Economic Sentiment (EUR, GMT 09:00) – German ZEW economic sentiment for May is expected to have dipped to -42.3, after plunging to 28 in April. This will be important for retail to actually recover as consumers need to be confident enough to go out and spend again.
  • Housing Starts and Building Permits (USD , GMT 12:30) – Housing starts should dip to a 1.000 mln pace in April, after falling to a 1.216 mln pace in March. Permits are expected to fall to 0.800 mln in April. All the housing measures will give up ground in April with shelter at home orders, though most states earmarked construction as essential, and many construction sites across the country remained open. Before the pandemic, permits had been following a solid growth path that began in Q2 of 2019 fueled by low mortgage rates, alongside strength in starts, and this strength will hopefully resume as the pandemic subsides.
  • Fed’s Chair Powell testifies (USD, GMT 14:00) – Federal Reserve Chair Jerome Powell testifies before Congress, providing a broad overview of the economy and monetary policy.

Wednesday – 20 May 2020

  • PBoC Interest Rate Decision (CNY, GMT 01:30) –The People’s Bank of China in its first-quarter report, announced a more aggressive monetary stimulus. In this meeting the should provide guidances on the next move in its Loan Prime Rates.
  • Retail Sales &  Consumer Price Index (GBP, GMT 06:00) – UK retail sales expected to finally give the first real insight into the UK’s post-lockdown economic hit. April’s retails should drop to -0.2% m/mInflation is seen unchanged with overall inflation expected to stand at 1.5% y/y, and core at 1.6% y/y.
  • Consumer Price Index and Core (EUR, GMT 09:00) – Headline inflation rates in Germany and the Eurozone are very low at the moment, largely thanks to the impact of the global slump in oil prices.There is much to suggest that headline inflation will fall further as global demand is depressed and unemployment rising sharply, which will keep a lid on wage pressures even as economies move out of lock downs. The final inflation rate for April stands at 0.5% .
  • Consumer Price Index and Core (CAD, GMT 12:30) – Canada’s CPI saw a sharp contraction in March that was more pronounced than expected but not a shock given the severe impact on the economy of stay at home orders and the tumble in oil prices. The April number however is anticipated slightly firmer at -0.4% from -0.6%.
  • FOMC Minutes (USD, GMT 18:00) – The FOMC Minutes report provides the FOMC Members’ opinions regarding the US economic outlook and any views regarding future rate hikes.

Thursday  – 21 May 2020

  • RBA’s Governor Lowe speech (AUD, GMT 02:30)
  • Markit PMI (EUR, GMT 07:30-08:00) – The prel. May composite PMI for both Germany and Eurozone forecasted to register an upwards reading  to 31.0 and 25.7 respectively following the huge drop seen last month. However clearly every reading below 50 suggest contraction in the economy.
  • Markit Services PMI (GBP, GMT 08:30) – The final UK services PMI (May 3) was revised slightly higher – to 13.4 from 12.3 reported initially. Still, as has been seen in other countries, the service sector drop was eye watering, diving to 13.4 (revised from 12.3) from 34.5 in March, with April being first month of data to fully capture the true impact of the coronavirus/lock down. The data reflects the wide extent of business mothballing due to the pandemic and consequence lock down, which commenced in the UK on March 23rd. This is not expected to change significantly in May, even though a slightly better reading is seen at 22.1.
  • Jobless Claims (USD, GMT 12:30)–  US initial jobless claims fell -195k to 2,981k in the week ended May 9, following the prior week’s -691k decline to 3,176k (was 3,169k). Initial claims have been declining since surging at the end of March to 6,867k.
  • Fed’s Chair Powell and Fed’s Clarida speech
  • Tokyo Core CPI (JPY, GMT 23:30) – Tokyo CPI is usually a good proxy for the Japanese economy’s overall inflation rate.

Friday – 22 May 2020

  • Retail Sales (GBP, GMT 06:00) – UK retail sales expected to give further glimpse into Covid-19 damage.
  • Retail Sales (CAD, GMT 12:30) –Canada’s retail sales growth moderated in February, which should give way to hefty declines in March. The ex-autos aggregate was flat after a revised 0.1% gain (was -0.1%). This report is another look in the rear view mirror and the last “clean” retail sales report for a while. Statistics Canada notes that the onset of COVID-19 and rail blockages impacted retail sales by a “negligible amount.”

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