We enter another week dominated by the coronavirus outbreak, with just about any item of interest likely to be linked to the disease in some way.
The global effort to tackle the virus continues, with Asia stepping up its efforts to battle a wave of new infections carried by people returning from overseas.
Hong Kong is to close more public venues while Singapore, South Korea, and Vietnam will introduce new entry rules.
In Italy, almost all businesses are to close in an effort to slow the spread in the country that has become the hardest hit by the disease.
India is locking down large swaths of the country until at least the end of the month, as it seeks to control the spread of coronavirus following a surge in cases.
G7 and European leaders are set use video conference to hold meetings to plan efforts to tackle the crisis.
In the UK, Primark will close all its stores from Sunday night after cancelling all new orders from suppliers, as the coronavirus outbreak continues to shut down the UK high street.
Several central banks are scheduled to set policy this week. Of these, the Bank of England is the big one to watch after it again took emergency action last week, cutting interest rates to 0.1 per cent.
This makes it unlikely the bank will cut again on Thursday, but investors will watch for signs of what other fiscal stimulus tools new governor Andrew Bailey has in the box as economies around the world head towards recession.
There are some key economic data points as analysts attempt to gauge the damage done by coronavirus so far.
US unemployment figures on Thursday will be closely watched as they could well be the worst the country has ever seen.
There will be a succession of flash purchasing managers’ index figures for March that are forecast to fall off the cliff as the spread of Covid-19 works its way into the data.
It will be a quiet week on the company earnings side, but Nike reports in the US and UK home improvement company Kingfisher will be of some interest.
Disney launches its streaming service in the UK and seven other European markets on Tuesday.
Central banks
The BoE will still meet for its regular meeting on Wednesday with the decision announced the following day.
Since its emergency meeting last week the bank has cancelled stress tests for the largest high street lenders as part of further measures to ease the strain on the economy from coronavirus.
The market doesn’t expect any further rate cuts for now but the situation is evolving fast and Mr Bailey has indicated that he is ruling nothing out — other central banks have resorted to negative rates and yield curve control. There has even been talk of “helicopter money”.
The communications after the decision will include the minutes for both meetings so analysts can start to garner an idea of the bank’s thinking on growth and inflation.
Elsewhere this week, Kenya is expected to cut rates for a third consecutive meeting on Monday. Nigeria has already announced two stimulus packages in a week so is likely to stay on hold on Tuesday.
Thailand is likely to cut rates when it meets on Wednesday. There are central bank meetings in Colombia, Hungary, the Czech Republic and Albania.
Company earnings
Kingfisher, which reports final results on Tuesday, has already warned full-year profit forecasts are likely to fall and cautioned that weak trading “begs the question whether its margin will need to be rebased next year. The owner of B&Q and Screwfix in the UK has already shuttered its stores in France and Spain because of coronavirus.
Drinks maker Fevertree has already issued two revenue warnings in three months owing to weak Christmas sales and a fall in demand due to coronavirus is expected to hit sales further.
Fellow fizzy drinks maker AG Barr also reports on Tuesday. Full-year results were set to show an improvement after the company issued a profit warning last summer, but that was before coronavirus took hold.
The Lloyd’s of London commercial insurance market publishes combined results data for its syndicate members on Thursday. A profit is expected after two years of losses, but again, coronavirus will be a factor.
Very little on the corporate front in the US this week, but Nike will be of interest when it reports on Tuesday. Strong demand for new lines is likely to have driven revenue up but profits are expected down after Covid-19 hit supply chains. Nike has also been forced to close stores due to the outbreak.
Economic data
Some of the biggest economies report flash PMIs on Tuesday and there is no doubt they will reflect the hit to manufacturing and services activity dealt by the Covid-19 outbreak, leaving only the question of how bad things will be.
China’s PMI data back in February provided the first big indication of the scale of the damage coronavirus had brought as the economy entered lockdown and comparisons are likely to be drawn between the US, UK, eurozone, Germany and France now they are at a similar stage in terms of the spread of the disease.
Eurozone manufacturing is expected to show a similar fall to China’s but the services index is likely to be only about half the decline in China, due to lockdown measures having being phased in over the month. However, it is still likely to be the lowest reading in the eurozone’s two-decade history.
France is set to escape the lows reached in the financial crisis, only by being helped by a large proportion of the data being collected before the full lockdown began.
Germany’s flash PMI are likely to show a collapse in corporate sentiment for March, broadly in line with the results of last week’s preliminary ifo survey.
In the UK, the PMIs will be the first data to cover disruption caused by the virus. A big fall is expected, but it should be a smaller than the eurozone as the UK’s initial response to the virus was less restrictive. A much bigger slowdown is expected for the second quarter.
Both US manufacturing and services PMIs are expected to weaken in the preliminary readings for March, as the economic impact of the coronavirus intensified sharply.
The other big data point for the week will be US initial jobless claims for the week ending March 21.
Goldman Sachs analysis shows weekly filings for unemployment benefits are poised to surge to a record 2.25m, up from 281,000, as businesses shut. This would overtake the high point for initial claims in the 1982 double-dip recession and the recession of 2007 to 2009.
Many states have reported that unemployment insurance filings spiked enormously in the days following the declaration of a national emergency concerning Covid-19 on March 30.
The UK also has inflation figures for February out on Wednesday, with the big drop in oil prices helping to put downward pressure on prices. Inflation did pick up slightly in January, but this was considered normal for the season and is expected to drift back down for this reading and well below the 2 per cent target level.
