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Week Ahead market preview: Markets crisis to continue?

George Walker and Ben Weiss, Friday, 13 March 2020

Week Ahead - Coronavirus Crisis

Markets in crisis - Will the coronavirus continue to send global stocks plummeting?

Markets in crisis! There’s one thing and one thing only dominating the markets at the moment and that is the coronavirus. The FTSE is down to 5,250 at the time of writing, its lowest level since 2012 with every single individual stock in the index falling. It’s been a similar story for the Dow (dropping a further 7% towards the end of this week), the DAX and Nikkei. Away from stocks, oil prices have also taken a hit thanks to the Russia-Saudi price war. 

So going in to this crucial week ahead, what is the outlook, what events should be monitored and will the coronavirus continue to send markets spiralling? 

Commodities 

Brent Crude will continue to be in focus as the price war between Russia and Saudi Arabia, two of the world’s most oil-rich nations, rages on. The virus sent demand, in Asia particularly, for oil much lower with fewer people using personal cars and the use of transport in general falling. Plans to mitigate this drop in oil price and address the subsequent loss of revenue from the state-owned companies by OPEC included limiting all countries’ output of oil. Russia was not in favour of this, prompting Riyadh to drop prices. Brent Crude will be interesting to monitor next week, with demand for oil still high in Russia given just over 30 cases of COVID-19 have been discovered.

Elsewhere, the (not-so) safe haven that is Gold took a major hit this week, losing 5% on Thursday down to 1560.0. This is amidst the dollar strengthening, and bears reacting to a lack of economic stimulus from the US. Also, Gold was at an eight-year high earlier on in the year, and the coronavirus had helped to maintain these highs as investors favoured the safe-haven asset. It’s possible traders are now choosing to realise profits from these highs, perhaps to mitigate losses elsewhere from equities. Bitcoin, also considered a safe-haven asset by some given its decentralised nature, also suffered, this time dropping 2000-points. 

FOMC - Important decision 

The FOMC meets on Wednesday afternoon where it will announce the FED’s interest rate decision. With rates having already been cut, it’s unlikely they will move again, especially given that the first change failed to sufficiently mitigate the impact of the coronavirus. But then again, can much stop the disastrous impact the virus is having on global economies? The statement will be released at 18:00, with a crucial Press Conference taking place at 18:30. This will be key for investors to decipher the comments in order to infer any future guidance on what further action may be taken to stem the impact of the virus. 

BoJ and PBoC in focus 

Early on Thursday and Friday morning, the Bank of Japan and People’s Bank of China respectively will release their Monetary Policy Statements and announce their Interest Rate Decisions. With there being limited room for any further cuts, it will be interesting to see if the BoJ follow the FED and BoE in cutting rates further. Similarly, will China move to cut rates to protect its economy given that it seems the country has seen the worst of the virus already?

The EUR Consumer Price Index at 18:00 on Wednesday may also be worth noting. The ECB ramped up stimulus again towards the end of this week in an attempt to revive the burning eurozone economies, but held off reducing already-rock-bottom rates. Were weak CPI figures to be released, further pressure might be heaped on the ECB to cut rates. 

ECONOMIC CALENDAR (all times are GMT)

Monday, 16 March

01:00 NZD ANZ Monthly Inflation Gauge

02:00 CNY Industrial Production

02:00 CNY Retail Sales

07:30 CHF Producer and Import Prices

13:30 USD NY Empire State Manufacturing Index

 

UK Company Announcements:

Taylor Wimpey

 

US Company Announcements:

N/A

 

Tuesday, 17 March

00:30 AUD House Price Impact

01:30 AUD RBA Meeting Minutes

04:30 JPY Industrial Production

07:00 EUR EcoFin Meeting

07:00 GER Producer Price Index

09:30 GBP Claimant Count Rate

09:30 GBP Claimant Count Change

09:30 GBP ILO Unemployment Rate

09:30 GBP Average Hourly Earnings Including Bonus

09:30 GBP Average Hourly Earnings Excluding Bonus

10:00 EUR ZEW Survey – Economic Sentiment

10:00 EUR Labour Cost

10:00 GER ZEW Survey – Economic Sentiment

12:30 USD Retail Sales

12:30 USD Retail Sales ex Autos

12:30 USD Retail Sales Control Group

12:55 USD Rebook Index

13:15 USD Industrial Production

20:30 USD API Weekly Crude Oil Stock

23:50 JPY Merchandise Trade Balance

23:50 JPY Imports

23:50 JPY Exports

 

UK Company Announcements:

Genel Energy

 

US Company Announcements:

FedEx Corporation

 

Wednesday, 18 March

10:00 EUR Trade Balance

10:00 EUR Consumer Price Index

10:00 EUR Consumer Price Index – Core

12:30 USD Building Permits

12:30 USD Housing Starts

12:30 CAD BoC Consumer Price Index Core

12:30 CAD Consumer Price Index

12:30 CAD Consumer Price Index – Core

14:30 USD EIA Crude Oil Stocks Change

18:00 USD Fed Interest Rate Decision

18:30 USD FOMC Press Conference

21:45 NZD Gross Domestic Product

23:30 JPY National Consumer Price Index

23:30 JPY National CPI ex-Food, Energy

23:30 JPY National CPI ex-Fresh Food

23:30 AUD Westpac Leading Index

 

UK Company Announcements:

Ferrexpo

Morrison (WM)

Pendragon

 

US Company Announcements:

General Mills Inc

 

Thursday, 19 March

00:30 AUD Employment Rate

00:30 AUD Unemployment Rate

00:30 AUD Participation Rate

00:30 AUD RBA Bulletin

03:00 JPY BoJ Monetary Policy Statement

03:00 JPY BoJ Interest Rate

04:30 JPY All Industry Activity Index

06:00 JPY BoJ Press Conference

06:00 CHF SNB Interest Rate Decision

07:30 CHF SNB Monetary Policy Assessment

10:00 GER ZEW Survey – Current Assessment

12:30 USD Initial Jobless Claims

12:30 USD Continuing Jobless Claims

12:30 USD Philadelphia Fed Manufacturing Survey

12:30 CAD ADP Employment Change

14:30 USD EIA Natural Gas Storage Change

 

UK Company Announcements:

Hurricane Energy

Next

Sportech

 

US Company Announcements:

Accenture PLC

Cintas Corporation

 

Friday, 20 March

01:30 CNY PBoC Interest Rate Decision

07:00 Gfk Consumer Confidence Survey

09:00 EUR Current Account

09:30 GBP Public Sector Net Borrowing

11:00 GBP BoE Quarterly Bulletin

12:30 CAD Retail Sales

12:30 CAD Retail Sales ex-Autos

14:00 USD Existing Home Sales

14:00 USD Existing Home Sales Change

17:00 USD Baker Hughes US Oil Rig Count

 

UK Company Announcements:

N/A

 

US Company Announcements:

Tiffany & Co

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