Daily Commentary BY THE CURVE TEAM –

Huge Week of Data as Pressure to Reopen Economies Grows

4th of May, 2020

With all the talk of unwinding containment measures, this week’s data and events will give a timely update on the state of the economy.

Politicians around the globe are coming under pressure to reopen economies as restlessness grows. It isn’t just countries such as Australia and New Zealand who have managed to slow the virus dramatically. The US is experiencing serious unrest despite the virus still spreading throughout the country.

Many are wanting to reopen economies to get back to the way things were. However, it is likely that many facets of life will be different moving forward. Just how quickly things recover will depend on the pace of reopening and measures that remain in place to stop the virus from reemerging once again.

This week’s data both here and offshore will give a clearer indication of the extent of the damage being caused by the global shutdowns. Some of the data will still predate the peak of the lockdown but will give vital clues to the outlook.

In Australia this week, the March data will include building approvals, retails sales and the trade balance. The more timely data for April will include the monthly inflation index, Job ads report and performance indicators for the construction and services sectors.

However, the real highlight this week will be the RBA. In addition to their monthly meeting on Tuesday, they will release their latest quarterly statement on monetary policy on Friday. The statement will contain the RBA’s latest forecasts on the economy which will give us a baseline for where things might be heading over the months ahead.

Offshore, the April jobs report in the US will be the highlight of the week. Job losses are expected to be huge as flagged by the weekly jobless claims data with more than 20 million Americans expected to have lost their job over the month. There will also be a swathe of activity indicators set for release.

David Flanagan

Director - Interest Rate Markets