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Economic Calendar - Top 5 Things to Watch This Week

EconomyMay 03, 2020 06:56AM ET
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© Reuters.

By Noreen Burke

Investing.com - The U.S. employment report for April will take center stage this week, laying bare details on the depth of the economic fallout from efforts to contain the spread of the coronavirus pandemic. The figures are expected to be historically unprecedented. Markets will also be watching the progress of some U.S. states and many European countries as they cautiously take steps to reopen their economies. Trade worries could come back to the fore after U.S. President Donald Trump ratcheted up anti-China rhetoric and oil prices will be watched for signs of sustained strength after record output cuts kicked in on Friday. Meanwhile, the Bank of England is to have a policy meeting on Thursday and publish its latest economic forecasts and financial stability assessment. Here’s what you need to know to start your week.

  1. Labor market wipeout

The Labor Department releases its nonfarm employment report for April on Friday and the overall pictures is expected to be staggering, with economists forecasting the loss of 21 million jobs for the month. That comes after a decline of 701,000 in March, when an historic 113 straight months of employment growth ended. The unemployment rate is expected to jump to 16%.

More than 30 million Americans have sought unemployment benefits in the past six weeks, or more than 18.4% of the working-age population. Restrictions such as stay-at-home orders and social distancing aimed at mitigating the spread of the virus have crippled business activity.

The data will likely add to the enormous pressure on states to reopen even though the number of coronavirus cases is still climbing in many parts of the country.

  1. Trade woes

U.S. President Donald Trump said on Friday raising tariffs on China is "certainly an option" as he considers ways to punish Beijing for its alleged failure to contain the coronavirus.

"A lot of things are happening with respect to China. We're not happy, obviously with what happened. This is a bad situation -- all over the world, 183 countries. But we'll be having a lot to say about that. It's certainly an option. It's certainly an option," Trump told reporters.

Whether Trump will risk the collapse of his trade deal with China is unclear, but he will be mindful of the threat the coronavirus death toll and economic damage pose to his chances of re-election in November.

  1. Gradual reopening

Many European countries are gradually reopening their economies, with Italian factories and building sites to reopen from Monday after Europe's longest lockdown. German schools, museums and churches, will also reopen following the reopening of small shops, while Britain will lay out its exit strategy in coming days.

Governments are wary of a second wave of infections, but with the European Central Bank predicting the euro area economy to shrink by as much as 15% this quarter, authorities are also keen to get activity going again.

Meanwhile, governors in about half of the United States partially reopened their economies over the weekend, with Georgia and Texas leading the way.

As of Saturday, the number of known infections across the U.S. had climbed to more than 1.1 million, including about 65,000 deaths, according to a Reuters tally.

  1. Bank of England to publish new economic forecasts

The Bank of England is not expected to make any changes to monetary policy at its meeting on Thursday, after it cut rates twice in March to a new low of 0.1% and ramped up its government bond-buying by a record 200 billion pounds.

Instead investors will be focusing on the publication of its new economic forecasts and the interim Financial Stability Report.

The BoE will announce its latest monetary policy decision at 06:00 AM GMT, rather than at the usual release time of 12 PM GMT, in order to accommodate the joint publication of the interim Financial Stability Report, which assesses the impact of the coronavirus pandemic on the finance industry.

BoE Governor Andrew Bailey will hold a press conference after the policy meeting.

  1. Will record output cuts bolster oil?

Oil prices climbed on Friday as OPEC and its allies embarked on record output cuts aimed at reducing a supply glut after the coronavirus crisis decimated global energy demand.

The global oil benchmark, Brent crude, has fallen almost 60% percent in 2020 and hit a 21-year low last month as the pandemic squeezed demand and OPEC and other producers pumped at will before reaching the new supply deal that kicked in on Friday.

The Organization of Petroleum Exporting Countries, Russia and other producers, known as OPEC+, has agreed to cut output by 9.7 million barrels per day from May 1.

Even so, some analysts doubt whether the reduction, the largest ever agreed, will be enough as demand is unlikely to recover rapidly.

--Reuters contributed to this report

Economic Calendar - Top 5 Things to Watch This Week
 

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Comments (7)
Mr Magoo
Mr Magoo May 03, 2020 2:29PM ET
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I predict the DOW will drop below 18000 in the next two weeks
Armando Gonzalez
Armando Gonzalez May 03, 2020 2:29PM ET
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the worst is behind us I think
Donald Wise
Donald Wise May 03, 2020 2:29PM ET
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Thats almost the same statement to declare WW3
Mr Magoo
Mr Magoo May 03, 2020 2:28PM ET
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I predict it will drop back to or below 18000 on the DOW
Midway Eholdings
Midway Eholdings May 03, 2020 1:04PM ET
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Only sell on the best of news
Hopar yuga
Hopar yuga May 03, 2020 11:59AM ET
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sell Zoom, buy Gild.that's simple folks.
Bullish Bear
Bullish Bear May 03, 2020 11:59AM ET
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Priced in already
Emmanuel Aprilakis
Emmanuel Aprilakis May 03, 2020 11:59AM ET
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Gilead is donating the Remdesevir after spending big money on the research
Shreeram Agrawal
Shreeram Agrawal May 03, 2020 11:45AM ET
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What will happen in Dow tomorrow i am in long position
abdul wahab
abdul wahab May 03, 2020 11:45AM ET
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hope u have stop loss in place
V E SKYLINE
V E SKYLINE May 03, 2020 11:45AM ET
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no one knows.. but likely drop more
Space Lord
Space Lord May 03, 2020 11:45AM ET
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Drop to 22000 in Chinese morning
julia zhou
julia zhou May 03, 2020 10:46AM ET
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Last Friday was last chance to get into the market.
Neo Nam
Neeo May 03, 2020 10:46AM ET
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Yeah, when FED actually starts to normalize when the economy is back in track, after Trump reelected, that will be the end of everything. not now
Jehan Shah
Jehan Shah May 03, 2020 10:17AM ET
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Can anyone with indepth forex knowledge give a forecast on how would this effect trading this week? Base on the factors above of course.
Show previous replies (2)
Jehan Shah
Jehan Shah May 03, 2020 10:17AM ET
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Nelson Fabian can u elaborate pls.. as from my obserbation the USD is gonna continue with its bearish trend due to increase in unemplloyment and slow recovery from corona.. whats your input?
Jonathan Reynolds
Jonathan Reynolds May 03, 2020 10:17AM ET
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Oil crash to real estate crash to bankruptcies and defaults to bank stress to inflation. In that order the next 6-12 months
david adapoyi
david adapoyi May 03, 2020 10:17AM ET
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From a technical pov, dollar is in a range right now, and I expect will appreciate for a few day. but by Friday..we'll see how it goes.
Lucrative Lucrative
Lucrative Lucrative May 03, 2020 10:17AM ET
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david adapoyi whats the analysis for GBPAUD this coming weeks pls
V E SKYLINE
V E SKYLINE May 03, 2020 10:17AM ET
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no one knows anything.. its gambeling
 
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