COVID-19 will again drive market sentiment this week, despite the end of month, quarter, half-year, and financial year (in the case of Australia).
In particular, the problems in the US with more and more cases emerging at a record pace in the south, southwest, and in California, will continue to worry investors and undermine confidence in the strength of the recovery.
What is clear is that markets in the US have gotten too far ahead of reality when it comes to controlling COVID-19 and the health of demand and economic activity.
The renewed fears about the mounting cases of COVID-19 in America means the recovery will get weaker and weaker unless there is a dramatic change in the medical situation or more leadership at the top – and that is not coming from President Trump.
Friday’s holiday in the US means a short week for the world’s most important markets and an earlier release of the most important data drop each month – the US jobs and unemployment figures.
Coming in a week when the US handling of the coronavirus pandemic re-emergence in more than 20 US states – and in record numbers for a dozen – the jobless data assumes great importance.
Another strong figure like the 2.5 million new jobs in May. The unemployment rate could fall to 12.5%, but if the Bureau of Labor sorts out it’s ongoing data collection problems, we may see the first real jobless rate for four months.
This means the June jobs numbers will be brought forward to Thursday, preceded by the private sector numbers on Wednesday. The US will also see homes sales and prices data, consumer confidence, construction spending, factory orders and trade numbers across the shortened week.
The minutes of the last Fed meeting are out on Wednesday. Other data includes pending home sales (today), consumer confidence (tomorrow) and the June manufacturing conditions index (on Wednesday). Car sales data for June will be out Wednesday and Thursday.
Australia will see private sector credit, house prices, and trade numbers (see separate story). Fisher & Paykel Healthcare reports earnings on today and Collins Foods tomorrow.
AMP Chief Economist, Dr. Shane Oliver says the Eurozone economic confidence data for June (today) is expected to show a rebound consistent with the upswing in business conditions PMIs, while core inflation for June (tomorrow) is likely to have remained weak and unemployment (Thursday) is likely to have increased.
The Eden Monaro by-election for the House of Reps will be held this Saturday.
In Japan jobs data for May “is likely to remain weak but industrial production may show some recovery” (with both due Tuesday). The Tankan business survey for the June quarter (on Thursday) is likely to show a noticeable weakening in conditions in business
Chinese business conditions PMIs for June (Tuesday and Wednesday) are expected to be little changed – confirming a stuttering recovery is still underway.