Markets were focused on three key events last week, the Bank of England rate decision, PM Johnson’s statement regarding the lockdown, and from the US, the labour data figures. Looking further afield, key economic data across the major economies remained negative last week but the market has become acclimatised to this and not reacting as aggressively as they normally would.

On Thursday, the BoE left interest rates unchanged at 0.1% and maintained its QE programme at £645bn, however two of its members voted for an increase in QE, whilst the BoE reaffirmed its readiness to provide more stimulus if necessary. The BoE also stated that it is predicting about a 30% plunge in UK GDP in H1, but its central scenario sees activity picking up “fairly rapidly” in H2.

On Friday, the US non-farm payrolls confirmed the economy had lost 20.5m jobs in April which sent the unemployment rate soaring to 14.7%, by far the worst number seen since the Great Depression. Prior to this release, the weekly claims rose by a further 3.2 million, the headline figure now stands near 33 million in 7 weeks. The US has now given back all of the employment gains made since the 2008 financial crisis; a 12-year positive streak lost in the space of six weeks.

Sunday’s lockdown announcement from the UK’s PM Johnson was eagerly awaited. PM Johnson laid out plans for how the economy could reopen, albeit a conditional plan. PM Johnson has stipulated that people who “can’t work from home” will be “actively encouraged to go to work”.  However, they should still avoid public transport if possible, because of social distancing. From Wednesday, people in England will be able to spend more time outdoors “for leisure purposes”. A “phased reopening” of shops – other than food stores may begin in England from 01 June at the earliest with potential for some of the hospitality industry and other public places to open at earliest in July. Further details will be released today in parliament. This is a conditional plan that will be adjusted where the government sees fit based on the data.


The docket is clear today. Liquidity returns following the UK bank holiday to celebrate VE day. It is likely that the market will continue to decipher last night’s lockdown statement from PM Johnson whilst examining the details which are due to be released in parliament. The market will articulate what that means for the economy moving forward.


  • US consumer price index

Given the economic backdrop and the decrease in the commodity prices, the market is expecting to see a second consecutive month of sliding prices.


  • UK Q1 GDP
  • UK manufacturing

The Office for National Statistics will release official Q1 GDP with a quarter-on-quarter contraction of 3.2% expected. As lockdown started in March, the market is already starting to focus on Q2 data.


  • BoE Gov Bailey speaks
  • US jobless claims

BoE Governor Andrew Bailey is due to participate in a webinar. Volatility is often experienced during his speeches as traders attempt to decipher future policy action. There will be an increased interest following the government’s plan to ease lockdown restrictions. In the meantime, the market will focus once again on the US weekly claims.


  • German GDP Q1
  • US retail sales
  • US UoM consumer confidence

Like the UK, Germany’s GDP is expected to decline but the focus is already on Q2 economic activity. Economic data in the US will be watched although how much impact the data releases will have is debateable. Both retail sales and consumer confidence are expected to slide as the unemployment rate is elevated.