Fundamental Comment

Economic Week Ahead: Growth, US data

Economic Week Ahead: Growth, US data

Financial markets' participants will be on a date with a number of important economic data this week, led by growth data from major economies, in addition to a number of important economic data from the United States.

It is necessary to note that indicators of industrial production and retails sales published by the Chinese economy are expected to be of great importance, as they will reflect the impact of the spread of the Covid-19 on the world’s second-biggest economy.

US Dollar

The movements of the US dollar this week will depend on the impact of economic data from the world’s largest economy, as well as any developments Corona virus as most states reopened on Sunday.

For economic reports, investors will carefully watch the consumer prices and retail sales data for April, in addition to the weekly report on unemployment benefits, which showed a significant deterioration over the past few weeks in the labor market as a result of the outbreak of the Covid-19.

The CPI for April may show a 0.7 percent drop, following a 0.4 percent fall in March, while expectations for retail sales, which largely reflect the size of household spending on goods and services, indicate an 11 percent decrease in April after an 8.7 percent decline in March.

As for the initial jobless claims, expectations are for 3.1 million in the week ended May 09, after 2.4 million registered a week before.

Euro

The euro will most likely move according to the impact of the GDP data on financial market, as growth data will become the main driver of the euro currency.

The flash GDP reading for the first quarter may remain unrevised at 3.8 percent, compared to the growth rate of 0.1 percent recorded in the final three months last year.

Pound Sterling

The Pound is expected to move in accordance with the results of growth in the first quarter, in addition to manufacturing, construction output and trade balance data, where the data will show the impact of the Covid-19 on the British economy.

The preliminary GDP reading for the first quarter may show a contraction of 2 percent, compared to a stall in the final three months last year.

Commodities

Gold prices fell at the end of last week's trading to lose about $4.52 of its value, after it recorded its highest level since April 27 during the same week as a result of the negative US jobs report.

This week, gold prices will depend on the important economic data published by major economies, especially the US and China.

With regard to oil, prices rose during last week's trading, with crude posting its second straight weekly rally, as the fight against the Corona pandemic eased, paving the way for increased demand.

Oil price movements this week will probably hinge on the state of optimism or pessimism the markets as many economies started reopening after lockdowns.

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