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The main highlight this week comes from central banks, where the European Central Bank will announce its latest rate decision on Thursday, followed by President Lagarde’s press conference. A change in the policy stance is unlikely according to consensus expectations. The priority of the ECB remains one of caution and is determined to avoid a premature tightening in financing conditions.
Another hot topic in Europe is one of the German chancellery, with the Green party taking the initiative to nominate their first chancellor candidate today following their steep gains in the polls to the detriment of Merkel’s CDU/CSU slump, making September’s federal election even more central to politics in Europe.
Covid developments is high on the agenda, as it remains one of the greatest risks that could throw the economic recovery off course. Cases continue to remain elevated despite the vaccine efforts, particularly in India. More people around the world were diagnosed with the coronavirus during the past seven days than any other week since the virus emerged, topping 5.2 million globally, according to data from Johns Hopkins University.
On the vaccine front, we are expecting that the European Medicines Agency will issue their recommendation on the Johnson & Johnson vaccine over the week ahead, which follows reports of blood clots occurring in the United States after the vaccine had been received, and remains under investigation.
The first earnings season for 2021 is now underway, with a fresh wave of companies reporting this week. 80 companies from the S&P 500 report along with a further 54 from the STOXX 600. Among the highlights include Coca-Cola and IBM on Monday, before Tuesday sees reports from Johnson & Johnson, Procter & Gamble, Netflix, Abbott Laboratories, Philip Morris International and Lockheed Martin. Then on Wednesday we’ll hear from ASML, Verizon, NextEra Energy, and Thursday sees releases from Intel, AT&T, Danaher, Union Pacific and Credit Suisse. Finally on Friday, there’s Honeywell International, American Express and Daimler.
On the data front, it’s rather uneventful, with the main highlight likely to be at the end of the week with the flash PMIs for April. This will give us an initial indication of how global economic performance has fared at the start of Q2, and there’ll be particular attention on the price gauges as well as investors stay attuned to any signs of growing inflationary pressures.
Fed speakers have now entered a blackout period ahead of their own meeting next week. Initial US jobless claims are expected to be released on Thursday, with the consensus forecast currently at 700K compared to 576K for the previous period.
Finally, the notoriously volatile crypto market has been at it over the weekend, as the mania that drove crypto assets to records as Coinbase went public last week turned on itself over the weekend. Bitcoin tumbled 15%, the most since February, before paring some losses this morning. Expect volatility in the space this week, as the frenzy which drove Coinbase’s direct listing to a value of $68 billion by the end of last week, making it more valuable than the New York Stock Exchange, comes into focus.
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