RBA, BoC and OPEC meet this week while virus fears linger. US employment report eyed.Posted on Monday, March 2 2020 at 7:42 am GMT+0000
The spread of the coronavirus outside of China has frightened markets last week. The number of infections outside China continued to explode, particularly in Italy and japan. And heightened fears that the virus turns into a pandemic and sparks a global recession, tormented financial markets. All major stock market indices melt down 10%-15% from all-time highs. Economists became forecasting Central Bank rate cuts as the global economy grinds to a halt, and investors piled into the safety of fixed-income markets and as a result the US 10-year yields and US 30-year yields put in all time new lows. Will the virus outbreak continue to hammer the financial markets this week too? Obviously, it will remain the main driver, and central bank meetings will highlight its potential effects on global economies and major data releases will most probably reveal its impacts.
Both Central banks in Australia and Canada will hold policy meetings this week, the former on Tuesday and the latter on Wednesday. So will they announce any shift in their policy stances? Most probably they will maintain a wait-and-see approach until a clearer picture starts emerging about the impact of the virus. But any more dovish tone given the recent developments will evoke renewed selling pressures on both the Australian and Canadian dollars correspondingly.
On the data front, the highlight of the week will be the US Employment Report for February due on Friday. After a solid gain of 225k jobs in January, the US economy is projected to have added 178k jobs in February. Average hourly earnings are forecast to have risen by 3.2% year-on-year, while the jobless rate is predicted to hold at 3.6%. Any positive surprises in the figures will probably help the US dollar recover some of its recent losses.
Other important releases are due to release as follow:
– German Manufacturing PMI (Feb) (08:55 GMT)
– UK Manufacturing PMI (Feb) (09:30 GMT)
– US ISM Manufacturing PMI (Feb) (15:00 GMT)
– RBA Interest Rate Decision (Mar) (03:30 GMT)
– RBA Rate Statement (03:30 GMT)
– UK Construction PMI (Feb) (09:30 GMT)
– EU CPI (YoY) (Feb) (10:00 GMT)
– Australian GDP (QoQ) (Q4) 00:30 GMT)
– UK Composite PMI (Feb) (09:30 GMT)
– UK Services PMI (Feb) (09:30 GMT)
– US ADP Nonfarm Employment Change (Feb) (13:15 GMT)
– US ISM Non-Manufacturing PMI (Feb) (15:00 GMT)
– BoC Interest Rate Decision (15:00 GMT)
– Crude Oil Inventories (15:30 GMT)
– BoE Gov Carney Speaks (17:00 GMT)
– Australian Retail Sales (MoM) (Jan) (00:30 GMT)
– US Nonfarm Payrolls (Feb) (13:30 GMT)
– US Unemployment Rate (Feb) (13:30 GMT)
– Canadian Employment Change (Feb) (13:30 GMT)
– Canadian Ivey PMI (Feb) (15:00 GMT)
On another hand, OPEC and its allies (known as OPEC+) will hold a scheduled meeting on Thursday and Friday and are likely to agree to additional output cuts as the demand outlook for oil continues to deteriorate in the face of a long-term impact on the global economy from the coronavirus.