PMI flash readings for Europe, the UK, and the US released! "Highlights for the week of April 20 and the event schedule"

 

The negative impacts from the coronavirus have almost been fully priced in.

With these expectations priced in, stock prices that had been sold off in risk-off sentiments began to rebound, gold rose, and the VIX index fell below the key level of 40.

 

While coronavirus infections in Europe are gradually stabilizing, attention is turning to whether Japan could become the next epicenter, or whether emerging regions with lower medical standards could become the center of infection.

 

As the coronavirus begins to settle, the US-China confrontation and political power struggles using the virus are intensifying.

After the virus calms down, mask diplomacy, the origin of the virus, WHO political use, and suspension of contributions may all trigger a renewed US-China conflict.

 

◎ This Week’s Points of Attention

 

1) Coronavirus

 

In Europe, the spread of the coronavirus is slowing, and in the United States the spread appears to have peaked.

Germany is beginning to discuss easing lockdowns and mobility restrictions, and the UK has announced delaying regulations.

Opinions differ, but the economy is gradually starting to recover from the downturn caused by the coronavirus.

 

In the United States, President Trump announced plans to reopen the economy in stages.

From which areas and in what manner the economy will restart, and how regulations will be eased, will be key—if economic activity and regulations ease, risk-off sentiment is expected to retreat, so this is worth watching.

 

 

 

2) Crude Oil Price

 

Last weekend, crude oil hit its lowest since 2002, but there are no catalysts for a rebound yet.

Economic stagnation due to the coronavirus continues, oil demand remains weak, and inventories are rising.

Supply and demand remain out of balance.

 

As travel restrictions related to the coronavirus are lifted and economic activity resumes, demand could rise, potentially lifting oil prices.

Also, if oil producers that cannot profit at around $20 per barrel exit, resulting in a reduced supply, prices could rise.

 

How long these two factors will take to unfold is unclear, but in the futures market, prices are rising in longer-dated contracts, suggesting many expect further price increases ahead.

Attention this week also on crude oil prices.

 

 

 

3) Economic Indicators

 

Recently, economic indicators have often been ignored by markets even when released.

There are two major types of indicators: those quantify past economics and those quantify future economic outlooks.

Because the impact of the coronavirus on the economy is already understood to be negative, bad numbers tend not to provoke much reaction.

 

More attention is given to how the economy will unfold, so indicators that quantify the outlook (economic expectations) are likely to react more.

Among these, PMI (Purchasing Managers' Index) is particularly watched as an outlook indicator.

 

In Europe, the UK, and the US, flash readings for manufacturing, services, and Composite indices are released, so keep an eye on them.

 

Another focus is employment, based on measures that quantify the past economy.

Attention is on how many people have become unemployed and lost jobs.

Pay attention to UK employment data and US initial jobless claims.

 

 

◎ This Week’s Economic Calendar

 

 

April 20 (Monday)

 

07:45 NZD NZ CPI (Consumer Price Index)

08:50 JPY Trade Balance

17:30 GBP Hardened BoE External Member Speech

 

 

April 21 (Tuesday)

 

10:30 AUDRBA Board Minutes

14:00 AUDRBA Governor Lowe Speech

15:00 GBPUK Employment, Average Earnings, Unemployment Rate

16:30 SEK Sweden Unemployment Rate

18:00 EUR ZEW Germany Economic Sentiment

18:00 EUR ZEW Euro Area Economic Sentiment

21:30 CADCanada Retail Sales

23:00 USD US Existing Home Sales

 

 

April 22 (Wednesday)

 

15:00 GBPUK CPI (Consumer Price Index)

20:00 TRYTurkey Policy Rate Decision

21:30 CADCanada CPI (Consumer Price Index)

23:00 EUR Euro Area Consumer Confidence

23:30 USD Crude Oil Inventories

 

 

April 23 (Thursday)

 

15:00 GBP UK Retail Sales

15:00 EUR Gfk German Consumer Confidence

16:15 EURFrance Manufacturing, Services, and Composite PMI

16:30 EURGermany Manufacturing, Services, and Composite PMI

17:00 EUREurozone Manufacturing, Services, and Composite PMI

17:30 GBPUK Manufacturing, Services, and Composite PMI

20:00 MXN Mexico Retail Sales

21:30 USDUS Initial Jobless Claims

22:45 USDUS Manufacturing, Services, and Composite PMI

23:00 USD New Home Sales

 

 

April 24 (Friday)

 

17:00 EUR IFO Germany Business Climate

21:30 USD US Durable Goods Orders

23:00 USD University of Michigan Consumer Confidence Index

 

 

April 25 (Saturday)

 

02:00 USDBaker Hughes Rig Count

 

 

 

 

 

 

 

 

 

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