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Macroeconomic & Geopolitical

Unemployment Claiming Year's Only Gold Medal

26 March 2020 - 3 min read

Continuing claims are set to increase substantially as more workers become unemployed during the pandemic, the Trump administration struck a deal on a $2 trillion package, and the Olympics will be pushed out a year.

Watchlist

Arrows indicate consensus forecast compared to the previous period. Local dates of release.

U.S.

  • Initial claims will likely remain near record-highs. Despite fiscal policy measures aimed to keep employees on payrolls, many companies will be forced to lay off workers as stores are shuttered and demand falters.
  • Real-time consumer spending indicators, such as weekly box office ticket sales, restaurant bookings, and hotel occupancy rates, are set to continue to weaken.  

Europe

  • Italy is working on another fiscal package, which the Prime Minister noted would be worth at least €25 billion—the amount of the first stimulus bill. This would bring fiscal stimulus to about 3% of GDP.
  • EA finance ministers are debating whether to provide a precautionary credit line to member states from the region’s bailout fund, the European Stability Mechanism. Alternatives are to set up a common budget to fight the economic impact of the crisis or to issue a common bond. Talks are ongoing and unlikely to be resolved soon.

Asia Pacific

  • We watch to see if the PBOC will cut the deposit rate as they aim to encourage banks to loan to struggling businesses, reduce lending rates, and increase bad debt tolerance. This would be the first deposit rate cut by the PBOC since 2015.
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