{"id":293278,"date":"2020-05-18T02:46:41","date_gmt":"2020-05-17T16:46:41","guid":{"rendered":"https:\/\/www.gomarketingteam.com\/articles\/week-ahead-a-war-of-words-amid-the-reopening\/"},"modified":"2021-02-19T12:13:49","modified_gmt":"2021-02-19T01:13:49","slug":"week-ahead-a-war-of-words-amid-the-reopening","status":"publish","type":"post","link":"https:\/\/www.gomarkets.com\/en\/weekly-summaries\/week-ahead-a-war-of-words-amid-the-reopening\/","title":{"rendered":"Week Ahead – A War of Words Amid the Reopening"},"content":{"rendered":"

By Deepta Bolaky<\/strong>
\n\u00a0@DeeptaGOMarkets<\/a><\/p>\n

The coronavirus war of words between China and some governments has dominated headlines over the past couple of weeks. The confrontation between the world\u2019s two largest economies is escalating as both the US and China are trying to send messages to the world about their response of COVID-19.<\/p>\n

China is spreading the message of successfully controlling the virus while the US is blaming China for not providing accurate information by being open and transparent and believes China should have done more to prevent the pandemic. Even though major world leaders are disputing on who is to be blamed, the response of other countries was not swift and timely enough.<\/p>\n

Many countries took time to realise the urgency and act accordingly which caused an epidemic to become a pandemic.<\/strong><\/em><\/p>\n

The conspiracy theories, misinformation and the propaganda are coming from all sides creating an environment of confusion for investors. The relationship between the US and China were already flawed by trade frictions and instead of bonding together to fight a pandemic, the world is witnessing a new cold war which is poised to be more dangerous and lasting for financial markets.<\/p>\n

Risk-off sentiment will likely hit markets as US-China tensions weigh on market sentiment.<\/strong><\/em><\/p>\n

The Reopening – New Cases<\/strong><\/h4>\n

Amid geopolitical frictions, the pandemic stays the predominant factor driving the markets. Investors will likely keep monitoring the number of new cases given that economies are gradually easing lockdown measures. As the world slowly opens, market participants want to gauge the speed at which the virus is spreading.<\/p>\n

Even though investors were initially buoyed by the reopening of businesses, caution will likely prevail as they are bracing for a rocky reopening. Virus resurgence fears following new clusters of coronavirus infections in certain countries and risks of a potential second outbreak will likely be important drivers of the price action in the financial markets.<\/p>\n

Brexit \u2013 No-Deal Preparations<\/strong><\/h4>\n

While the Bank of England is preparing the UK to probably face the worst economic contraction in 300 years, Brexit woes resurfaced. There was little progress made in trade talks and the negotiations seem to have reached a deadlock. Following the UK Prime Minister\u2019s insistence of not extending the transition period, investors are preparing for the \u201c-no-deal scenario\u201d.<\/p>\n

The British Pound is revisiting lows amid mixed messages regarding the easing of lockdown, the BoE leaving the doors open for negative interest rates, a Brexit standoff, and dismal economic reports.<\/p>\n

Haven Flows<\/strong><\/h4>\n

A combination of heightened geopolitical tensions and uncertainty around the reopening of economies will drive up the demand for safe-haven assets like the US dollar and the Gold. The greenback will likely keep its status as the King Dollar compared to its peers if risk sentiment continues to fluctuate between fears arising from geopolitical tensions and economic recessions, and the reopening plans.<\/p>\n

Economic Data \u2013 PMI <\/strong><\/h4>\n

The preliminary PMI figures in major countries like the UK, US, Germany and the Eurozone will be eyed for further insights on the severe contraction seen so far in the manufacturing sector. Central Banks minutes like the Fed and RBA will also be closely watched.<\/p>\n

Key Events Ahead<\/strong><\/h4>\n

Monday<\/strong>
\nGross Domestic Product (Japan)
\nEurogroup Meeting (Eurozone)<\/p>\n

Tuesday<\/strong>
\nRBA Meeting Minutes
\nIndustrial Production (Japan)
\nClaimant Count Change, ILO Unemployment Rate, Average Earnings (UK)
\nEcoFin Meeting and ZEW Survey – Economic Sentiment (Eurozone)
\nZEW Survey – Current Situation and Economic Sentiment (Germany)
\nBuilding Permits and Housing Starts (US)
\nGDT Price Index (New Zealand)<\/p>\n

Wednesday<\/strong>
\nWestpac Leading Index (Australia)
\nPBoC Interest Rate Decision (China)
\nConsumer and Retail Price Index, and PPI Core Output (UK)
\nGfk Consumer Confidence (Germany)
\nConsumer Price Index, ECB Interest & Deposit Rate Decision, ECB Monetary Policy Statement and Press Conference (Eurozone)
\nBoC Consumer Price Index (Canada)
\nEIA Crude Oil Stocks and FOMC Minutes (US)<\/p>\n

Thursday<\/strong>
\nCommonwealth Bank Manufacturing PMI (Australia)
\nMerchandise Trade Balance, Imports and Exports (Japan)
\nMarkit Manufacturing and Services PMI (UK)
\nPhiladelphia Fed Manufacturing Survey, Jobless Claims, Markit Manufacturing, Services and Composite PMI and Existing Home Sales (US)<\/p>\n

Friday<\/strong>
\nNational Consumer Price Index (Japan)
\nPublic Sector Net Borrowing and Retail Sales (UK)
\nMarkit Manufacturing, Services and Composite PMI (Germany)
\nMarkit Manufacturing, Services and Composite PMI (Eurozone)
\nZEW Survey – Expectations (Switzerland)
\nRetail Sales (Canada)<\/p>\n

By Deepta Bolaky<\/strong>
\n\u00a0@DeeptaGOMarkets<\/a>
\n<\/a><\/p>\n\n\n\n\n\n\n\n
Tuesday, 19 May 2020<\/strong>\u00a0<\/strong>
\n<\/strong>Indicative Index Dividends
\nDividends are in Points<\/sup><\/em><\/td>\n<\/tr>\n
ASX200<\/strong><\/td>\nWS30<\/strong><\/td>\nUS500<\/strong><\/td>\nUS2000<\/strong><\/td>\nNDX100<\/strong><\/td>\nCAC40<\/strong><\/td>\nSTOXX50<\/strong><\/td>\n<\/tr>\n
0<\/td>\n3.138<\/td>\n0.269<\/td>\n0.061<\/td>\n0.5210<\/td>\n<\/td>\n0<\/td>\n<\/tr>\n
ESP35<\/strong><\/td>\nITA40<\/strong><\/td>\nFTSE100<\/strong><\/td>\nDAX30<\/strong><\/td>\nHK50<\/strong><\/td>\nJP225<\/strong><\/td>\nINDIA50<\/strong><\/td>\n<\/tr>\n
0<\/td>\n0<\/td>\n0<\/td>\n0<\/td>\n31.221<\/td>\n0<\/td>\n0<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n


\n<\/a><\/p>\n

Disclaimer: Articles and videos from GO Markets analysts are based on their independent analysis. Views expressed are of their own and of a \u2018general\u2019 nature. Advice (if any) are not based on the reader’s personal objectives, financial situation or needs. \u00a0Readers should, therefore, consider how appropriate the advice (if any) is to their objectives, financial situation and needs, before acting on the advice. For more information of trading, check out our forex trading courses<\/a>.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

By Deepta Bolaky \u00a0@DeeptaGOMarkets The coronavirus war of words between China and some governments has dominated headlines over the past couple of weeks. The confrontation between the world\u2019s two largest economies is escalating as both the US and China are trying to send messages to the world about their response of COVID-19. 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