As we enter a new week of trading, here are the key events to watch out for which will affect the markets.
Tomorrow we will see the release of the United Kingdom's gross domestic product (GDP) for the first quarter of the year. The UK's previous GDP growth stood at 0.5% for the last quarter of 2019, as household spending was the lowest it had been since 2016, as government spending increased the most. Current predictions for this quarter's GDP are at -1.8%, and some analysts are even estimating a 15% loss in economic output for the second quarter, as the UK is struggling to contain its coronavirus outbreak. Just three days ago Prime Minister Boris Johnson tested positive for COVID-19, after continuing to shake hands with hospital staff where virus patients were being treated.
These figures will definitely affect markets such as the UK stock index, or FTSE 100, and the Pound pair currencies, as well as other markets, as the UK's GDP represents 2.4% of the global economy.
Of course, the most important event this week will be Friday’s Non-farm payroll (NFP) release. Released at the first week of each month, NFP is a key market event, and for good reason. It measures the amount of jobs that were gained or lost in the US for the previous month, and as such is a key indicator of how the US economy is performing.
A typical NFP release sees the markets becoming very volatile leading up to its release, with of course the US pairs being the ones primarily affected. The previous month saw the number of jobs in the US excluding agricultural positions rise by an impressive 273,000. However, early predictions for this month’s numbers see a loss of at least 100 to 150,000 jobs.
The jobless claims data which released last week saw a staggering 3.8 million Americans file for unemployment, an unprecedented figure which far exceeded any and all expectations. Therefore, this week’s claims data will also be worth watching, to see how much the figure will move.
Other factors affecting the market open will be the $2 trillion coronavirus bill, officially called the CARES Act, which was approved by Congress and signed by President Donald Trump earlier today. While this should stop the downward spiral of US stocks, US stock futures have been very uncertain, as the pandemic continues to ravage the States as well.
Trump has also gone back on his statement of reopening the country by Easter, as he extends the social distancing guidelines to the end of April. This comes as the United States is now the country with the highest number of official cases, with over 140,000 and counting. For reference, the country with the previous highest number, Italy, is currently at 97,000.
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