![\"US](\"https:\/\/shared.gighl.com\/Week_Ahead\/2020\/5-May-15-05-2020\/us-initial-jobless-claims.PNG\")
<\/p>\nFinancial releases are considerably adverse in both sides of the Atlantic as well as in other parts of the world, showing that the pandemic still weighs heavily on the global economy. The coming week is expected to provide a substantial amount of financial releases which may provide a glimpse on how the world economy is reacting and in some parts of the world rebounding from the hit. Starting with Monday, where we get Japan\u2019s GDP growth rates for Q1, while on Tuesday we get UK\u2019s employment data for March and Germany\u2019s ZEW economic sentiment for May. On Wednesday we get UK\u2019s and Canada\u2019s CPI rates for April. On Thursday we get Australia\u2019s, UK\u2019s and Japan\u2019s flash PMIs for May while from the US we get the latest weekly initial jobless claims figure, the Philly Fed Business Index for May, as well as the preliminary US Markit PMI\u2019s for May. On Friday, attention is expected to be on the release of Japan\u2019s CPI rates for April and the European preliminary PMI readings for May, while we also get UK\u2019s and Canada\u2019s retail sales growth rates. Also, a number of monetary policy events could draw attention as a number of central bank officials are scheduled to speak and the Fed\u2019s last meeting minutes are due out.<\/p>\n
In the US political stage, the reopening of the US economy is heavily debated as US lawmakers have hearings on the issue. Dr. Fauci\u2019s warning that a possible premature opening of the US economy would risk an increase of the infections rate and Trump\u2019s following rebuke still echo. At the same time and at a separate hearing, it should be noted that Dr. Bright\u2019s warning, that the US may be facing its \u201cdarkest winter\u201d, made headlines spurring more controversy on whether the reopening of the US economy is premature on not. Also, in international politics, Trump\u2019s threat to cut trade ties with China, over Covid-19, intensified our worries about further escalations in the US-Sino relationships. However, the US-Sino relationships tend to be a key issue for the US elections in November, which may perpetuate the issue further and also harden the rhetoric of president Trump. On the monetary front, the event of the week for the US was definitely Powell\u2019s comments on Wednesday. The Fed\u2019s chief rejected the idea of negative interest rates, while at the same time stroke a more somber tone by noting that an extended period of weak growth maybe in the cards for the US. He also stated that additional fiscal support could be costly, but worth it. We expect his testimony on Tuesday as well as his speech on Thursday to draw the spotlights and could create substantial volatility for the USD. Please note that on Tuesday also the Head of the US treasury, Mnuchin will be testifying. Also, the release of the minutes of the Fed\u2019s last meeting on Wednesday, could create some volatility for the USD. As for financial releases, albeit there are a number of them due out next week, we tend to highlight on Thursday the release of the latest initial jobless claims figure, the Philly Fed business index for May and the preliminary Markit PMI\u2019s for May.<\/p>\n
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GBP briefly touched a 5 week record low against the USD yesterday, as the bearish momentum for the pound seems to continue. As the UK government tends to retain the deadline for the termination of the Brexit negotiations unchanged, Brexit risks seem to weigh on the sterling. The combination of the weak financial data with Brexit risks tends to provide fertile ground for the bears to enter, as the pandemic still has a firm grip over the UK. It is characteristic that the UK currently suffers the highest death toll in Europe, while seems to be also delaying a reopening of the economy. We tend to maintain a bearish outlook for the GBP, and also note that more monetary easing is expected by the BoE which could hurt the pound. The market has started suspecting that the BoE may allow its interest rates to slip into the negatives. Hence, the comments which are to be made by BoE\u2019s Governor Bailey on Wednesday before UK lawmakers, could draw considerable attention. As for financial releases we tend to focus on four. On Tuesday, we get UK\u2019s employment data for March, on Wednesday UK\u2019s CPI rates for April and on Thursday UK\u2019s preliminary PMI\u2019s for May. Finally, on Friday pound traders could be eyeing UK\u2019s retail sales for April.<\/p>\n
![\"UK\u2019s](\"https:\/\/shared.gighl.com\/Week_Ahead\/2020\/5-May-15-05-2020\/uks-employment-data.PNG\")
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Eurozone finance ministers are to hold a video-conference on the economic response to the coronavirus crisis, today and could go well into the night. It should be noted that the recent ruling of the German Constitutional Court\u2019s (GCC) decision about ECB\u2019s QE program may be increasing pressure on Eurozone\u2019s finance ministers to scale up any fiscal stimulus planned. We also expect that any speeches scheduled by ECB officials could also generate interest. It should be noted that the current financial crisis has driven an even wider rift between the richer north and the pourer south of Europe and analysts tend to underscore that Italy\u2019s government debt may be spiraling, while the German economy may be protected by its government\u2019s fiscal strength. According to media, the EU is working on an \u2018Ambitious\u2019 plan for an economic recovery and further details are to be released next week causing interest among EUR traders. ECB Commission President von der Leyen stated that it will include also grants and not only loans. Last week it was characteristic that ECB officials signaled on Wednesday, that the Eurozone has hit the low point of its economic crisis caused by the Coronavirus infections and may now be on the rebound. However the statement is to be put to the test next week as the area\u2019s preliminary PMI\u2019s for May are to be released on Friday. Also note that Germany\u2019s ZEW indicators for May are due out on Tuesday.<\/p>\n
![\"Eurozone\u2019s](\"https:\/\/shared.gighl.com\/Week_Ahead\/2020\/5-May-15-05-2020\/eurozone-pmis.PNG\")
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The yen was down against the USD yesterday, breaking the upward trend that was formed since the past week. Powell\u2019s comment rejecting the prospect of negative rates may have reduced somewhat safe haven inflows, for the Japanese currency. BoJ governor Kuroda\u2019s statements yesterday were also reassuring as the governor stated that there was no need to deepen negative rates now, however also noted that there is still substantial room for further reducing the policy rate. It should be noted that the state of emergency imposed, was lifted in 39 out of the 47 prefectures of Japan. The lifting followed a sharp drop of new infections as per media. Hence Japan seems to be skipping the worst of the pandemic, yet the strongly export oriented economy may require also more normalisation of the global trading terms to recover. JPY traders are to get a better view of the situation early in the week, as during Monday\u2019s Asian session we get Japan\u2019s GDP rates for Q1, while on Thursday we get the preliminary Jibun manufacturing PMI for May. Also the spectre of deflation still looms over the Japanese economy hence we expect the CPI rates for April, released on Friday, to gather substantial interest from traders. Other noteworthy financial releases next week, would be the machinery orders growth rate for March on Wednesday, and Japan\u2019s trade data for April on Thursday.<\/p>\n
In Canada the first signs of easing seem to be eyed by the public as well as traders, as Ontario unveils the first stage of the reopening plan. We expect that traders may lend an ear as Prime Minister Justin Trudeau addresses Canadians on the country’s coronavirus response on Monday. It should be noted that the CAD has been strengthening over the week against the USD yet on Thursday suffered a setback for the day. Analysts tend to note that, should oil prices continue to rise slowly but steadily, the CAD could benefit further. However, we still consider the situation of the global oil market as critical and fragile. On the monetary front Poloz\u2019s speech on Thursday was quite encouraging as BOC\u2019s governor stated that the bank\u2019s best case coronavirus scenario remains within reach. Also, the bank\u2019s governor stated that ingredients for a very robust return to economic growth in the second half of this year, were present. In its financial stability review, the bank stated that its measures \u201care showing signs of succeeding\u201d, which was also encouraging for CAD traders. On Thursday, BoC\u2019s governor is scheduled to speak before the media ahead of his retirement from office, on June 2. As for financial releases, next week we tend to note the release of Canada\u2019s inflation measures for April on Wednesday, while on Friday we get the retail sales growth rates for March.<\/p>\n
![\"Canada\u2019s](\"https:\/\/shared.gighl.com\/Week_Ahead\/2020\/5-May-15-05-2020\/canada-inflation.PNG\")
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Disclaimer:<\/p>\n
This information is not considered as investment advice or an investment recommendation, but instead a marketing communication. IronFX is not responsible for any data or information provided by third parties referenced, or hyperlinked, in this communication.<\/i><\/p>","protected":false},"excerpt":{"rendered":"
Financial releases are considerably adverse in both sides of the Atlantic as well as in other parts of the world,<\/p>","protected":false},"author":15,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_daim_seo_power":"","_daim_enable_ail":"","footnotes":""},"categories":[1],"tags":[],"class_list":["post-14658","post","type-post","status-publish","format-standard","hentry","category-uncategorized","blog-category-financial-news","entry"],"acf":[],"yoast_head":"\n