How Much Damage Did Coronavirus Do To China In Q1?

How Much Damage Did Coronavirus Do To China In Q1?

Spreadex  | Apr 10, 2020 10:27

Post-Easter the week builds to perhaps the most important figures since the coronavirus pandemic began: China’s Q1 GDP reading.

China
Months ahead of its Western peers, China is just now starting to come out the other side of the coronavirus crisis, with Wuhan – the epicentre of the illness – lifting some of its lockdown measures after 11 weeks.

Now, following a series of awful manufacturing and services PMIs, investors will get a look at how much damage covid-19 has done to the Chinese economy when the first quarter GDP figures are released on Friday.

Q4 2019 saw growth of 6.0%, which back then was seen as a disappointment. For Q1 2020 analysts are expecting a contraction as great as 10% to 11% year-on-year – that’d be the first time the country’s economy had shrank since 1989.

Joining those growth numbers on Friday are the fixed asset investment, industrial production, retail sales and unemployment rate readings, all of which will further break down the impact of the pandemic.

From these figures Europe and the US can get a better idea, perhaps, of what they will be facing down the road.

US
As for the US, there is a decent stream of data, including Tuesday’s import prices, Wednesday’s retail sales and, of course, Thursday’s unemployment claims.

For the week ending April 4th, another 6.6 million people lost their jobs, making it roughly 16.6 million in the space of 3 weeks. Yet, once again, investors were distracted from the sheer size of those numbers, this time by a $2.3 trillion loans package from the Federal Reserve.

Will there be another distraction this week, when the total number of newly unemployed Americans will likely cross the 20 million mark?

UK
It looks like, from a data perspective at least, the UK is going to take its time shaking off the Easter break. The week doesn’t throw up much at all, though no doubt the commodity-heavy FTSE is going to incredibly anxious to get a look at those Chinese GDP numbers.

In terms of corporate updates, JD Sports posts its full year figures on Wednesday, with trading announcements from Hays and Rentokil Initial (LON:RTO) on Thursday, and a release from Cranswick (LON:CWK) on Friday.

Eurozone
The Eurozone has a bit more going on for it than the UK, but not by much. The German preliminary Ifo business climate reading arrives on Thursday, as does the region-wide industrial production number, while on Friday there’s the latest inflation figures.

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Hemanta Deka
Hemanta Deka

Don't worry. The Chinese are intact. They have given headache to the global economy with a cold blooded plan named Covid19.   ... (Read More)

Apr 12, 2020 18:08 GMT· Reply
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