The leaders of the G7 will hold an emergency meeting by videoconference on Monday. French president Emmanuel Macron said the group will coordinate research efforts on a vaccine and treatments, and work on an economic and financial response.
The Fed could cut rates again next week after only lowering the federal fund rate by 0.5% during an emergency move on 3 March. A cut would take interest rates down to 0.75%. The last cut in interest rates failed to lift market sentiment. There is no guarantee that the next one could do any better.
Meanwhile, the US will report latest retail sales numbers for February. They are expected to register a dip of 0.4% month on month. Consumer spending can be an important driver of economic growth in America. The expected drop in February does not bode well for the health of the world’s largest economy.
Turning to China where retail sales for January and February are expected to fare even worse. They could register a drop of as much as 7% year on year. But the People’s Bank of China could still decide to keep the loan prime rate, at 4.05%. It had already lowered the benchmark lending rate by 0.1% in February.
Staying with central banks, the Bank of Japan is expected to keep its key short-term interest rates unchanged at -0.1%. The central bank still believes that the rate of inflation will remain below its 2% target at least until early 2022.
Bank Indonesia will also have to decide what to do at its next interest-rate meeting. In February, it lowered its 7-day reverse repo rate by 0.25% to 4.75% in response to the possible impact of the Wuhan virus. It was the first cut since October 2019. But it could stand pat this month.
Thailand’s balance of trade could rebound to a surplus for February. In January, its trade deficit dropped sharply to US$1.56 billion after exports only grew 3.3% year on year.
And finally, Singapore could say that the headline inflation rate inched lower from 0.8% to 0.7%. The core inflation rate could have fallen a smidgen from 0.3% to 0.2%.
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Disclosure: David Kuo does not own shares in any of the companies mentioned.
