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Economic data at the moment tends to fall into one of two categories: 1) How bad did things get in Q1, and, 2) How quickly are they likely to get better? Everyone knows the Q2 data is where the real pain lies, but markets want an idea of where things stood before the effects of COVID-19 lockdowns really began to bite. 

To this end flash Q1 GDP figures from the UK, Germany, and the Eurozone this week will act as a primer ahead of data for the current quarter. The US has already reported its advanced GDP estimate for Q1, showing that the economy contracted 4.8% during the first three months of the year, compared to expectations of 4%. 

The UK economy is expected to shrink 4.4% on the previous quarter, the German economy by 2.8%, and the Eurozone by 3.8%. If the US data is any indication, these forecasts may not be bleak enough. 

The key question, though, is whether this weakness is the predicted impact of COVID-19 arriving earlier than expected, or a sign that the impact is worse than the already dire expectations. 

The US will post inflation and retail sales data, and the University of Michigan will publish its preliminary reading of its latest sentiment index. Australian releases this week include the wage price index and employment change and unemployment rate figures. 

China industry, retail sales and New Zealand Budget 

On the other end of the scale, Chinese industrial production and retail sales figures for April will give markets a vague idea of what an economy on the other side of lockdown looks like. It’s not an entirely accurate bellwether – China returned to work around the same time that Europe battened down the hatches. 

The shuttering of businesses across the West will damage manufacturing demand in Asia. Industrial production is expected to drop 4.2%, compared to a 1.1% drop in March. Retail sales had cratered nearly 16% in February. The unemployment rate is expected to tick higher to 6.3% from 5.9%. 

Also on the post–COVID front, the New Zealand government will hand down its latest Budget release this week. Finance Minister Grant Robertson has already laid out his strategy in a prebudget speech (delivered via video link, of course): respond, recovery, rebuild. 

Particularly interesting is that Robertson says this will be a chance to not just rebuild the economy, but rebuild it better. Will other finance ministers around the globe be looking to reshape their economies over the coming months and years, or simply get the train back on the rails? The notion could drastically change what markets should expect from the coming years. 

Earning season: Marriott, Cisco, Tencent 

Marriott earnings are due before the market opens on the 11th. The hotel giant recently raised $920 million in new cash through its credit card partners. Revenue per available room was down 60% during March. 

The stock has a “Hold” consensus with a 19% upside (based on the May 6th closing price) according to our Analyst Recommendations tool. Hedge funds has sold shares in the previous quarter, while insiders have snapped up the stock. The latest research on the stock from Thompson Reuters is available to download in the Marketsx platform.

Marketsx stock sentiment tools: Marriott International Inc (MAR – NASDAQ)

Cisco reports after the market close on May 13th. While analysts rate the stock a “Buy”, hedge funds dumped 83 million shares in the last quarter, with company insiders selling over 9 million in the last three months. The latest research on the stock from Thompson Reuters is available to download in the Marketsx platform.

Marketsx stock sentiment tools: Cisco Systems Inc (CSCO – NASDAQ)

Tencent Holdings, Sony, and Wirecard also report this week.

 

Heads-Up on Earnings 

The following companies are set to publish their quarterly earnings reports this week: 

Pre-Market11-MayMarriott – Q1 2020
 11-MayBridgestone Corp – Q1 2020
05.00 UTC12-MayAllianz – Q1 2020
 12-MayVodafone Group – Q4 2020
Pre-Market13-MayTencent Holdings – Q1 2020
After-Market13-MayCisco – Q3 2020
 13-MaySony Corp – FY 2019/20
 14-MayWirecard – Q1 2020
 14-MayAstellas Pharma – Q4 2019

 

Highlights on XRay this Week 

07.15 UTC  Daily     European Morning Call  
09.00 UTC  Daily  Earnings Season Daily Special  
 15.30 UTC12-May  Weekly Gold Forecast
12.50 UTC13-MayIndices Insights
18.00 UTC 14-MayBlondeMoney Gamma Special

 

Key Economic Events 

Watch out for the biggest events on the economic calendar this week: 

23.50 UTC10-MayBank of Japan Summary of Opinions
01.30 UTC12-MayChina CPI
07.00 UTC12-MayUK Preliminary Quarterly GDP
12.30 UTC12-MayUS CPI
01.30 UTC13-MayAustralia Wage Price Index (Q/Q)
03.00 UTC13-MayRBNZ Interest Rate Decision
14.30 UTC13-MayUS EIA Crude Oil Inventories
01.30 UTC14-MayAustralia Employment Change / Unemployment Rate
02.00 UTC14-MayNew Zealand Annual Budget Release
12.30 UTC14-MayUS Jobless Claims
14.30 UTC14-MayUS EIA Natural Gas Storage
02.00 UTC15-MayChina Industrial Production / Retail Sales
06.00 UTC15-MayGermany Preliminary GDP (Q1)
09.00 UTC15-MayEurozone Preliminary GDP and Employment Change (Q1)
12.30 UTC15-MayUS Retail Sales
14.00 UTC15-MayPreliminary University of Michigan Sentiment Index

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