Jobs stay in focus

Posted by: Paul Donovan

02 Apr 2020
  • Yesterday's business sentiment opinion poll data results were all over the place. This may partly be timing differences. It must also be due to a lower response rate. You have to be an unusual sort of person to fill in a survey in a lockdown.
  • There is non-survey based data that will help economists. Claims for the UK's Universal Credit were almost ten times normal. This compensates for low income (covering unemployment, some furloughed workers, and reduced hours). US initial jobless claims data are due and will be a market focus. Over time, minimizing the rise in unemployment will be vital to limiting the length of the phase one demand drop.
  • US factory orders, durable goods and trade numbers are all due. These will have mainly been surveyed before the lockdowns started, so are more reliable but less relevant data. There may possibly be some effects from China's shutdown, but this seems unlikely.
  • Media reports suggest China is to buy oil for its strategic reserves. In a lockdown, a lot of oil demand is lost demand. If you do not drive your car in a lockdown, you do not drive it twice as much after a lockdown. Strategic purchases are a partial offset.

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