The economic and market turmoil sparked by the global coronavirus pandemic will continue to be the centre of attention, as investors look to central banks, including the US Federal Reserve, to provide further support this week.
Here’s what to watch.
Central banks
The Fed will hold its regularly-scheduled March meeting after making its first emergency rate cut since the 2008 financial crisis earlier this month.
After slashing its benchmark rate by half a percentage point on March 3 — along with measures to ease the strain on financial markets — the Fed is expected to make an additional cut at the conclusion of its two-day policy meeting on March 18. Traders expect officials to lower the federal funds rate by at least another 75 basis points, which would bring the Fed’s target range to between 0.25 per cent and 0.5 per cent.
“The Fed has already slashed interest rates and flooded the markets with liquidity, but it will have to go further in the coming weeks, with a return to near-zero interest rates and a resumption of large-scale quantitative easing now likely,” Capital Economics said in a note.
The Bank of Japan is also expected to add to stimulus measures in the face of the coronavirus outbreak and its fallout for the global economy.
Other central banks, including the Swiss National Bank, are scheduled to make rate calls this week.
Economic data
Investors will be keeping close watch on incoming economic data to gauge the early impact of the coronavirus.
Among the reports due this week include US retail sales, which are forecast to have grown month-to-month in February amid strength in the labour market and wages. An increase in demand for personal care items, ready meals and other grocery store staples may have boosted spending as well. Data on existing home sales, housing starts and building permits will update investors on the health of the domestic housing market, which has received support from low mortgage rates.
China will release its latest figures on industrial production and retail sales, after the spread of Covid-19 shut down factories and businesses across the country.
FedEx, considered an economic bellwether, will report quarterly earnings.
Democratic primaries
The race for the Democratic nomination has essentially come down to a two-man contest between former vice-president Joe Biden and Vermont senator Bernie Sanders. The two contenders will participate in a debate in Washington on the evening of March 15, after organisers moved it from Phoenix and barred an audience on concerns over the coronavirus.
The primary schedule also has been put in question amid efforts by states to limit gatherings. On Friday, Louisiana postponed its party primaries to June from April.
Source: Economy - ft.com
