The Bank of England meets this week, the last of the big central banks to take a breath and set policy after their earlier rounds of unscheduled action to tackle the economic fallout from coronavirus.
US jobs figures will add to the picture of the damage done so far by the pandemic and there are plenty of earnings reports to keep investors abreast of how companies are coping with the crisis.
Lockdowns continue to ease in some places, with Italy of particular interest as the first European country to feel the full force of Covid-19.
There is a key court ruling on the European Central Bank’s bond-buying plans and economic forecasts due on EU member states that will have a bearing on their eligibility for economic aid.
Italy eases back to work
Italy will allow factories and building sites to reopen from Monday before allowing more businesses to open in the following weeks as it prepares a staged end to Europe’s longest coronavirus lockdown.
There are still divisions over how quickly restrictions should be lifted amid conflicting worries over the high coronavirus death toll and an economy in freefall.
Many Italians are keen to return to earning a full salary and getting the economy back on its feet after being placed on a national temporary unemployment scheme at 80 per cent of their wage.
However, there are still concerns about whether new Covid-19 requirements for safety and daily sanitisation will be met as well as fears about strains on the transport system.
UK-US trade talks
The UK will plough ahead with trade talks with the US on Tuesday as both nations insist that the negotiations will not be derailed by the coronavirus pandemic.
A video conference call will be held between Liz Truss, international trade secretary, and Robert Lighthizer, US trade representative. The first round of negotiations will last for two weeks and will involve 200 officials. Future talks will take place every six weeks, according to officials.
EU economic forecasts
The European Commission will on Tuesday reveal the extent to which it forecasts coronavirus will have hit GDP growth, inflation, unemployment and public debt and deficit for the 27 countries of the EU for 2020 and 2021.
The predictions will be used to help the EU gauge how much aid will be granted to member states to tackle the economic damage from the pandemic.
ECB bond ruling
Germany’s constitutional court will on Tuesday publish its verdict on whether the ECB’s bond-buying programme can deviate from the so-called capital key, which dictates purchases according to the size and population of each country.
A ruling against the programme or any limits on purchases would be a serious blow to the central bank’s efforts to step up the rate of bond buying in Italy and Spain.
Central bank meetings
The Bank of England meeting on Thursday is the main event in the calendar, with no further rate cuts expected.
Quantitative easing is another matter. The bank announced £200bn of bond purchases at its March emergency meeting, but it is getting through that at quite a lick, which would allow policymakers to argue that it might be better to act at this meeting before any stresses start to appear in the market that could force more unscheduled action.
The BoE’s quarterly monetary policy report with growth and inflation forecasts is out the same day.
The Reserve Bank of Australia is expected to keep rates on hold at 0.25 per cent on Tuesday as the country faces its first recession for almost three decades.
Norway’s policymakers meet on Thursday, when the Norges Bank is expected to keep rates at 0.25 per cent, while the Czech Republic is expected to cut rates by 0.5 percentage points the same day.
Brazil is expected to cut rates again on Wednesday, while Chile is set to stay on hold at its meeting. Peru meets on Thursday, where rates are again believed to be as low as the central bank is willing to take them.
The minutes for the Bank of Japan’s meeting last week are out on Wednesday.
Earnings
Plenty of earnings coming up this week. Among them in the UK will be broadcaster ITV, which updates on Wednesday with the focus on how the pandemic has hit advertising revenues.
Telecoms group BT reports full-year results on Thursday with investors watching closely to see if it joins other blue-chips in recent weeks and cuts its dividend.
InterContinental Hotels updates on the same day with investors on the lookout for the Holiday Inn owner’s plans to reopen in Europe.
Although just a 10th of IHG’s US hotels are closed, occupancy rates have collapsed. Room bookings are 20 per cent of the usual volume. Most hotels in China have now reopened.
Elsewhere Italian-American carmaker Fiat Chrysler has first-quarter results on Tuesday and General Motors follows on Wednesday.
ViacomCBS, home to MTV and the Paramount film studio, reports on Thursday when the focus will be on advertising revenues in the pandemic. Walt Disney reports on Tuesday.
Activision Blizzard, Electronic Arts and Zynga will be watched to see if people spending more time inside during lockdown has benefited the video games industry.
European reports include French energy major Total, where the collapse in oil prices presents a grim backdrop.
The picture for Air France-KLM, which reports on Thursday, is not good either. The airline’s shares have dropped by 55 per cent so far this year as the whole airline sector has been devastated by lockdowns.
Shares at the world’s largest brewer, AB InBev, which reports first-quarter results on Thursday, have lost more than half their value since the start of the year as Covid-19 weighs heavily on consumption.
ArcelorMittal, the world’s largest steelmaker, reports the same day after cutting production due to collapse in demand from construction and car industries.
German engineering group Siemens has second-quarter results on Friday.
Friday also brings a run of Japanese earnings, with trading houses Mitsubishi and Sumitomo, investment bank Nomura and Nippon Steel among those reporting.
Economic data
The key data point of the week will be US non-farm payrolls on Friday, when a wave of lay-offs is expected to push US unemployment for April beyond the rate seen during the financial crisis and closer to levels experienced during the 1930s.
US nonfarm payroll employment is set to fall by 22m in April compared with a drop of 701,000 in March, according to estimates from 10 analysts polled by Bloomberg.
The data will be released on the same day as the US unemployment rate, which analysts estimate will hit 16.3 per cent, up from 4.4 per cent in March. This would be the highest rate since at least 1948 — as far back as monthly data from the Bureau of Labor Statistics stretches — and on an annual basis it would be the highest since 1939, according to records from the Census Bureau.
These figures follow the weekly US initial jobless claims, out on Thursday. Weekly initial claims peaked at nearly 7m in late March. There were 3.8m claims in the week ending April 25, down from 4.4m the week before. For the week ending May 2, numbers around the 3m mark are expected.
Other figures to watch out for this week include:
Monday
Tuesday
Wednesday
Thursday
Germany: Industrial production Germany had looked to be avoiding industrial recession after strong readings in the first two months of the year, then Covid-19 hit. The consensus forecast for March is a month-on-month reading of minus 7 per cent
China: Trade balance Imports and exports are expected to contract even as the world’s second-largest economy shows some signs of recovery
Friday
