Federal President Jerome Powell will testify before the US Congress on economic stimulus measures taken to date .
On Wednesday, the Fed will release the minutes of its April meeting .
Traders are awaiting unemployment benefit claims data .
Retail sales shed light on spending amid the spread of the Corona epidemic, while on Tuesday we await the delivery of West Texas crude contracts for June .
While we expect to reduce interest rates from South Africa, and from Turkey again .
Here’s the most important thing to know about global financial markets this week .
1. Powell testimony, and federal minutes
On Tuesday, US Federal Reserve Chairman Jerome Powell will appear before the Senate Banking Committee, along with Treasury Secretary Stephen Mnuchin, to update government officials’ data on economic stimulus programs taken to date .
Powell spoke painfully frankly last week that affected market sentiment, stating the long-term risks affecting the American economy, and the potential need to elect officials to agree to spending programs to keep the economy afloat and prevent it from sinking .
On Wednesday, the Fed is to publish the minutes of its April meeting . In the interest statement last month, the Fed said it would keep interest rates close to zero until officials had ” sufficient confidence in the ability of the US economy to withstand the consequences of recent events .”
2. Economic data
The weekly US data continues to focus on jobless claims . The American economy is slowly returning to work, finding a foothold for itself, and economists hope the number will drop to a minimum of 2.5 million people, which will reflect the somewhat slow pace of demobilization .
The Pound is awaiting a week full of economic data this week : March employment updates, retail sales, and inflation data . Given the UK delaying the start of isolation and separation measures until the end of March, we may not see the impact of the epidemic on employment figures this time .
As for the retail sales data , it may be down for the month of April by at least 15% , while oil prices are declining, which pressures the inflation numbers down .
3. Profits of retail sales companies
The first-quarter earnings season is coming to an end in the United States, and the retail sector is just beginning . This week we see data from : Walmart, Home Depot, Target, Kohls and Best Buy . These figures highlight whether consumers are still able to pay money despite the outbreak of the Coronavirus and its economic implications .
After the Amazon giant data, retailer data came out, and stocks were among the biggest beneficiaries of staying at home . Amazon shares rose 28% from the start of the year to today .
4. Oil, stalking danger?
The oil market is awaiting the delivery date for June contracts for WTI crude next Tuesday, and energy traders are somewhat afraid of a price collapse, as happened last month .
Delivery times, contract expiration times are usually marginal, but after the price crash last month, they became a focus of negativity .
The Commodity Futures Trading Commission warned market participants of volatility and negative prices again, with oil stocks remaining almost full and the bleak fate of demand .
But oil prices have recovered strongly over the past three weeks, with hopes of improving demand again, after the weekly weekly US oil stockpile fell for the first time since January .
However, doubts remain among some traders after the authority’s warnings . It is worth noting that trading volumes on July contracts are 50% superior to Ueno contracts .
5. Emerging markets and interest rates
Central banks in both South Africa and Turkey make interest decisions on Thursday, and the interest rate is expected to be lowered given the losses in local currencies .
Analysts’ forecasts are for South Africa to cut interest rates to 4.25% , another 50 basis points . Economists stress that there must be a lot of policy facilitation if the suffering economy is to be helped .
The policy meeting in Turkey will be more important, with the Turkish lira falling to record low levels, the depletion of reserves at the central bank of foreign exchange, and the arrival of inflation to double digit numbers, but this will not prevent the central bank from reducing the interest rate from 50-100 basis points, by 8.75%.
– This report is contributed by Reuters
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