23.04. Eurozone business activity drops to a record low in April Business activity in the eurozone in April reached another record low, which is a sign that the coronavirus pandemic is causing serious economic damage to the whole region. According to preliminary data, the purchasing managers index (PMI) of IHS Markit in April fell to 13.5 points. In March, the same index already recorded the largest monthly decline to 29.7. Chris Williamson, chief economist for business at IHS Markit, said that activity in the second quarter could record the worst recession in history. The International Monetary Fund (IMF) predicts a decline in the eurozone economy by 7.5% in 2020. European leaders today should discuss further measures to stimulate the economy. Eurozone finance ministers have formed a €500 billion package of financial measures to deal with the economic shock caused by the pandemic, but each EU government believes that additional funding is still needed.
24.04. US Consumer Sentiment better than forecast in April The University of Michigan Consumer Sentiment Index, which reflects household confidence in the US economy, fell to 71.8 in April. The March indicator was fixed at 89.1 points. Analysts polled by Reuters expected a drop to 68 points. The coronavirus pandemic has led to a loss of over 26 million jobs in the past five weeks. That’s more than the employment gains since the Great Recession.
27.04. Gold slips amid boost risk appetite On Monday, the price of gold began to decline amid rising risk appetite after signs that countries could soon weaken coronavirus-driven lockdowns. The spot price of gold fell to $1,720.05 per troy ounce. However, experts predict that the fall will not last long, as market participants hope for the introduction of new incentive measures by leading central banks. The price of palladium rose by 0.72%, to $ 2.039.68 an ounce, and platinum – by 0.27%, to $761.80 an ounce. Silver fell 0.14% to $15.22.
28.04. Unemployment in Spain jumped to 14.4% According to the National Statistical Institute of Spain, the country's unemployment rate rose to 14.4% in the first quarter of 2020. In the previous quarter, unemployment was 13.8%. Analysts predicted its jump to 15.6% in January-March. However, these data only partially reflect the effects of restrictive measures introduced to combat coronavirus. Isolation measures were introduced just two weeks before the end of the quarter, and most of the research had already been done by then. According to figures, about 898.822 thousand people have lost their jobs since March 12 in quarantine. The tourism and construction sectors suffered the most. The Bank of Spain assumes that this year unemployment could jump to 21.7%, and the economic contraction could reach 12.4%.
29.04. US GDP drops 4.8% According to the first estimate, US GDP in the first quarter of 2020 fell by 4.8%. Analysts had expected a decrease of 4%. A negative impact on the economy was exerted by measures of social isolation in response to the coronavirus pandemic. A key component of GDP (consumer spending) fell by 7.6%. At the same time, private gross investment continued to decline for the fourth quarter in a row, losing another 5.6%. Exports fell by almost 9% and imports by 15%. It is worth considering that the negative impact of COVID-19 on the country's economy began in March. In this regard, experts predict an even more significant blow to the economy in the II quarter. Here, drop estimates range from 20% to 40%.
30.04. ECB leaves interest rates unchanged According to the results of the meeting on Thursday, the European Central Bank (ECB) kept the base interest rate on loans at zero and the deposit rate – at minus 0.5%. The margin lending rate was left at 0.25%. These decisions coincided with the expectations of most experts. The ECB also said that rates will remain at the current level or lower until inflation in the eurozone approaches the target of the Central Bank. The regulator also announced the launch of a new long-term lending program for Eurozone banks, lowered its interest rate on long-term lending operations (TLTRO III) and announced its readiness to increase the scale of the Pandemic Emergency Purchase Program (PEPP), amounting to 750 billion euros . In addition, the European Central Bank has promised to continue redeeming bonds under the PEPP program until it concludes that the crisis caused by the coronavirus pandemic has come to an end.
01.05. Baker Hughes announces April 2020 rig counts According to Baker Hughes, an American oil and gas service company, the number of oil and gas drilling rigs around the world fell in April in monthly terms by 450 units, to 1,514, or 23%. In annual terms, the number of operating rigs decreased by 626, or 29.2%. In the USA, according to the company, the indicator in monthly terms decreased by 206, or 26.7%, and amounted to 566, in Canada – by 100, or four times, up to 33 units. The number of drilling rigs in Europe decreased by 11 (-8.9%) to 112. In the Middle East, the total number of rigs decreased by eight (-1.9%) and amounted to 420. In the Asia-Pacific region (APR), the number of rigs decreased by 40 (-17%), to 191, in Africa – decreased by five, or 4.6%, to 103. In Latin America, the indicator fell by 80 (-47.3%), to 89 installations.
05.05. US stocks rise in hope of global economic recovery According to trading data, the main US indices are growing amid the emergence of prospects for the recovery of the global economy after the crisis caused by the coronavirus pandemic. Traders evaluate the news of the gradual lifting of quarantine measures in a number of countries, in particular in Italy. Thus, the Dow Jones Industrial Average (DJIA) index grew by 1.27% – up to 24050.99 points, the index of high-tech companies NASDAQ – by 1.44%, up to 8836.43 points, the S&P500 wide market index increased by 1, 29%, up to 2879.55 points. An additional factor of optimism on the exchanges is also the restoration of the oil market. Today, the price of Brent grade has reached $30.30, and WTI crude oil – $24 per barrel. However, pressure on the US stock market had data on the US trade deficit. In March, the figure rose to $ 44.4 billion, turning out to be worse than the forecast of $ 44 billion.
06.05. US private sector reduces by 20.236 million According to a US employment report from ADP, a record 20.236 million Americans lost their jobs in April. Analysts had forecast a decline of 20.050 million workers. Forced layoffs in response to an outbreak of coronavirus in the country led to an increase in the number of layoffs. March data was revised downward to show that the number of jobs was reduced by 149 thousand jobs instead of the previously registered 27 thousand. Experts note that this was the first decline since September 2017. Such a strong drop in private sector jobs has shown that quarantine restrictions to slow the spread of COVID-19 can have long-term disruptive effects on the US economy, even if non-core businesses open.
May, 07. Industrial production in Germany in March fell at a record pace According to the German Ministry of Economics and Labor, industrial production in the country fell by 9.2% in March compared with the previous month, which was the largest decrease since the start of data collection in 1991. Experts predicted a decrease in industrial production by 7.5%. The automotive industry showed a decline of 31.1% in monthly terms. Manufacturing production decreased by 11.6%. The production of capital goods fell by 16.5%. However, the performance of the construction industry showed an increase of almost 2%. The orders of industrial enterprises in Germany in March fell by 15.6% compared to February, which also became the minimum value since the beginning of data collection in 1991.
