There will be a further easing of the lockdowns brought by the coronavirus this week as Europe and the US continue along the path to reopening their economies.
Gross domestic product figures for Germany and the UK will be the week’s main data points, while the US and China have retail sales later in the week.
There will also be a steady stream of earnings results, with some of Europe’s big industrial groups reporting.
Lockdown measures
The UK will begin the week with Boris Johnson having dropped his “stay at home” message in favour of a “stay alert” slogan as he prepares to set out his plan for a slow release of Britain’s lockdown and coax the country back to work.
Fast-food chain McDonald’s will restart deliveries in the UK while in the US Apple will reopen several of its stores, beginning with a location in Boise, Idaho, on Monday and a few others in South Carolina, Alabama and Alaska later in the week.
Shanghai Disneyland will reopen on Monday to a reduced number of visitors. Disney says it will cap attendance “far below” the 30 per cent of capacity set by the Chinese government.
In Spain about half the population will begin the so-called phase one of the transition from the lockdown on Monday, when restaurants and bars can serve clients outdoors, shops selling non-essential items can open without appointment and private gatherings of 10 people or fewer can be held.
Badly hit areas such as Madrid and Barcelona will have to wait at least another week for such steps.
Spain, one of the countries that has been worst affected by the coronavirus pandemic, hopes to phase out lockdown for the whole country by late June or mid-July.
France will relax some of its strict lockdown rules, allowing more cars on the streets and some shops to reopen.
Elsewhere in Europe, all Belgian shops will be allowed to reopen if they have social-distancing measures in place and children in Switzerland will also return to school.
Finally, a cautionary tale. South Korea’s capital Seoul will begin the week with social distancing measures back in place after a new cluster of coronavirus cases linked to a party district raised fears of a new wave of cases.
Argentina debt
Argentina’s showdown with its private creditors is set to go down to the wire. After an offer to restructure $65bn of foreign debt failed to secure enough support among investors by the government’s self-imposed deadline last Friday, it has now been extended to Monday.
If there is no agreement between the two parties, Argentina could descend into its ninth sovereign debt default as soon as May 22, when a grace period ends for a $503m debt payment that the government skipped last month.
Earnings
In the US athletic-wear maker Under Armour, cosmetics company Coty and casino operator Caesars Entertainment report on Monday, with all expected to be hit by Covid-19.
In the UK it will be a similar story when holiday operator Tui (Weds) and retailer WHSmith (Thurs) report.
Supermarket WM Morrison’s food sales are likely to have risen due to stockpiling before the lockdown was imposed, but the company, which reports on Tuesday, has less of an online presence than its rivals, which could weaken sales.
Vodafone investors will at least have something other than coronavirus to focus on when the company reports on Tuesday thanks to the tie-up between rival mobile operator O2 and Virgin Media. Vodafone was due to host all of Virgin Media’s customers from the end of next year.
British Gas-owner Centrica, luxury British carmaker Aston Martin and bookmaker William Hill also report.
Elsewhere Saudi Aramco will announce its first-quarter earnings before Saudi bourse begins trading on Tuesday.
TP ICAP updates on Wednesday. The world’s largest interdealer broker is expected to report a rise in first-quarter revenue after hitting record-breaking volumes in early March on the back of volatility in oil prices and equities following the coronavirus crisis.
Deutsche Telekom reports on Thursday, its first results since US unit T-Mobile closed its takeover of Sprint, creating by far the largest business division of the German mobile operator.
The pandemic is set to hit German industrial giant Thyssenkrupp hard on Tuesday.
French high-speed rail maker Alstom reports full-year results the same day, with investors looking for details on the progress of its plan to buy Bombardier’s rail business for up to €6.2bn.
Carmakers Toyota and Honda both have full-year results on Tuesday.
Central banks
US Federal Reserve chair Jay Powell will be in focus on Wednesday when he discusses the economic challenges facing the central bank during a webinar on Wednesday.
It’s a fairly quiet week for scheduled meetings, with none of the big-hitters in play.
New Zealand is expected to keep rates on hold when it meets on Wednesday.
Mexico meets on Thursday with a half-point cut forecast.
Belarus (Weds), Egypt (Thurs) and Ghana (Fri) complete the line-up.
Economic data
Plenty of first-quarter GDP figures from across Europe this week, with the UK (Weds) and Germany (Thurs) taking centre stage as the picture emerges of the moment economic activity stopped in its tracks when lockdowns were introduced in the two countries.
Germany’s economy is expected to have contracted by 2.3 per cent in the first three months of the year, its worst performance since the global financial crisis in 2009.
The UK economy is expected to shrink by 2.5 per cent for the quarter.
Both of these reports are seen as only a taster of the falls that will follow in the second quarter, when the damage brought by the coronavirus will become apparent.
The Bank of England last week forecast that the pandemic will push the UK economy into its deepest recession in 300 years, with output plunging almost 30 per cent in the first half of the year.
The second release of eurozone GDP is out on Friday. Analysts warn it could be revised down, after an initial reading of a fall of 3.8 per cent.
The Netherlands, Norway, the Czech Republic, Hungary, Poland and the Slovak Republic also have first-quarter GDP figures.
Other figures to watch out for this week include:
Thursday
US: Initial jobless claims The rate of claims has been steadily falling from a peak of nearly 7m in late March shortly after the lockdown began, a trend that is forecast to continue in the weeks ahead
Friday
China: Retail sales, investment and industrial production All will be closely watched for signs of recovery in the world’s second-largest economy
US: Retail sales Sales tumbled 8.7 per cent for March, the biggest fall since 1992. A Reuters survey of economists forecasts an even bigger drop, 11.6 per cent, for April
Source: Economy - ft.com
