Money Minute, Monday 30 March: grim numbers expected from the US

Good morning and welcome to Money Minute, your comprehensive preview of this week’s biggest financial stories.

Last week we saw yet more unprecedented action from governments and central banks to tackle the economic fallout from the coronavirus. The Federal Reserve, the US central bank, announced effectively unlimited quantitative easing and various other measures to keep the financial system from collapsing under the pressure of the economic shutdown. The European Central Bank took further steps to prevent the borrowing costs of vulnerable eurozone countries such as Italy from exploding higher. And US politicians signed off on a stimulus package worth $2 trillion, which will include individuals receiving one-off payments direct from the government.

However, we are also starting to see just how damaging a combination of the virus and the shutdown has already been. US weekly jobless claims soared above three million last week. That’s the biggest rise ever in weekly claims, and compares to just 280,000 the week before. And it will likely get worse before it gets better. So what does this week hold?

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It’s a quiet week for economic data in the UK – a reading on house prices is due from Nationwide, but is now of little relevance, although comments on the outlook will be of more interest. We also get the final reading for GDP for 2019, but again that seems hopelessly irrelevant from where we are now. On Tuesday we get the latest unemployment figures from Germany.

On Wednesday in the US, we get a snapshot of manufacturing activity for March which will no doubt show some signs of the coronavirus impact. Then on Friday, the US non-farm payrolls report for March comes out. This will give some indication of just how badly the labour market has been hit by coronavirus so far. Again, this is only likely to get worse from here on in. That said, a grim reading is already expected so markets are unlikely to react strongly to the report.

Stay safe and have a good week!