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What mattered last week and a preview of the week ahead 24th February

February 24, 2020 5:00 AM
 

What mattered last week:

  • A negative week for the benchmark U.S. stock index the S&P 500 as the spread of Covid-19 in countries outside of China increased including Japan, South Korea, and Iran.
  • Despite China cutting interest rates and announcing new stimulus measures designed to offset the Covid-19 shutdown.
  • Apple warned it would miss revenue targets for the March quarter with other companies expected to soon follow suit as a result of Covid-19.
  • Japanese GDP for Q4 shrank by a larger than expected 6.3% annualized due to the impact of a sales tax rise and a devasting typhoon.
  • Chinese stimulus and flight to safety flows combined to send the price of key commodities gold, crude oil, and iron ore higher.
  • The Australian unemployment rate rose from 5.1% to 5.3% and heighten expectations of a an RBA rate cut in coming months.
  • Locally the ASX200 finished the week unchanged near 7140 as prospects of an RBA interest rate cut were offset by concerns over the impact of Covid-19.
  • In FX, the USDJPY experienced a five standard deviation rally, while the AUDUSD fell below .6600c for the first time since March 2009.

For the week ahead, the key events are:

Australia: Construction work (Wednesday), Capex Q4 (Thursday), private sector credit (Friday).

  • Capex Q4 (Thursday): The market is looking for a rise of 0.2% in Q4, however with the survey having been undertaken during the bushfires and onset of Covid-19, there are downside risks to this number. More importantly, we will get a first look for Capex plans for 2020–21.

December half earnings season continues with reports from companies including Rio Tinto, Woolworths, Flight Centre, and the A2 Milk Company.

New Zealand: Retail sales (Monday), balance of trade and ANZ business confidence (Thursday), ANZ Roy Morgan consumer confidence (Friday).

China: NBS manufacturing and non-manufacturing PMI’s (Saturday).

Japan: Unemployment, retail sales, industrial production (Friday).

U.S.: S&P Case -Shiller Home price index, CB Consumer confidence (Tuesday), new home sales (Wednesday), durable goods orders (Thursday), personal spending and income, Chicago PMI (Friday).

Canada: Wholesale sales (Monday), GDP Q4(Friday).

  • GDP Q4 (Friday): After a dovish shift from the BoC in January, Fridays GDP print will be a closely watched number. The expectation is for a sluggish print of +0.3% annualized, which will leave open the door for a rate cut from the BoC in April.

Euro Area: German IFO survey (Monday), EA economic sentiment index (Thursday), German employment, and inflation as well as EA flash inflation (Friday).

UK: Nationwide housing prices (Thursday), GFK Consumer confidence (Friday).

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