Key events in developed markets next week

Once again, initial jobless claims will be the main data release for markets. Containment measures to try and stem the spread of Covid-19 mean shutdowns are spreading across the country with 75% of the population now under stay-at-home orders. The result is that companies are increasingly shutting their doors and laying-off staff. We look for another reading around the three million mark for initial claims this week. With risks skewed towards the containment measures lasting into May, we would not be surprised to see unemployment hit 15% in coming months with our best guess being that the economy contracts 40% in 2Q.

We also have consumer confidence readings, which are likely to fall further due to rising unemployment, economic uncertainty and falling asset prices. Meanwhile inflation looks set to fall sharply led by a sharp plunge in gasoline prices from $2.47/gallon at the end of February to $1.98/gallon at the end of March.