We know that US job losses are inevitable as COVID-19 takes its toll on the economy. Next week, we will find out just how bad it has been….
…. The rising non-farm payroll has been a popular boast of the Trump administration. But April’s figures of two million people out of work could expose the deficiencies of the US president’s handling of the pandemic.
Meanwhile, the US unemployment rate could climb from 4.4% in March to around 15% in April, which would be another indictment of the Trump administration. Elsewhere, America’s balance of trade could show another deficit, as exports fall faster than imports.
China will return from its mini “golden week” holiday with some key trade numbers. Both exports and imports could have fallen significantly. The trade balance is expected to be negative for the third time in four months.
Central banks in focus
The eurozone is expected to say that retail sales fell 8% in March from a year ago. Compared to February, retail sales could have fallen almost 11%.
The Reserve Bank of Australia will announce its latest interest-rate decision. The central bank is expected to keep the cost of borrowing unchanged at a record low of 0.25%.
Elsewhere, Southeast Asia’s fourth-largest economy, Malaysia, could cut its overnight policy rate by 0.25% to 2%. Malaysia could also say that its balance of trade increased from RM12,6 billion in February to RM17.5 billion in March.
Indonesia is forecast to report another decline in economic growth. In the fourth quarter of 2019, it said the economic shrunk slightly to register an annualised economic rate of 4.97%. It was the weakest pace of expansion since 2016. This time, the growth rate could be as low as 3.6% for the first quarter of 2020.
On the results front, United Overseas Bank (SGX: U11) and OCBC (SGX: O39) complete the Singapore bank earnings seasons with first-quarter results. Both banks are expected to report lower profits as their make higher provisions for bad debts. The banks are also having to deal with lower interest margins, slowing loan growth and the sharp drop in oil prices.
There are also results from Jardine Cycle & Carriage (SGX: C07), CapitaLand (SGX: C31) and Sembcorp Industries (SGX: U96).
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Disclosure: David Kuo owns shares in Jardine C&C, UOB and OCBC.
