The coronavirus pandemic seems to be slowing down in Europe. The leading economies in the EU have sped up their vaccination efforts, though at an average of 13-15% of adults vaccinated with one dose the EU is still far behind the United States or the United Kingdom. Daily infections and hospitalizations have also been decreasing. While Germany has opted to keep its lockdown in place for now, Italy will be loosening some of the restrictions.
In terms of the economic calendar, today there are a few highlights. First off, China presented some mixed inflation reports. While the YoY inflation rate in March and the PPI climbed more than expected, the monthly inflation reading dropped below the forecasts to -0.5%.
In Europe, Switzerland published a better than anticipated unemployment rate of 3.4% for March. Germany, on the other hand, delivered some disappointing trade balance data. France also failed to meet the forecast for its monthly industrial production, which sank to -4.7% against an expectation of 0.5%.
Later today Canada will deliver employment change and unemployment rate reports, plus wages data. The only interesting publication from the United States today will be a PPI monthly reading.
Market experts expect that PPI readings from virtually anywhere will begin turning out positive now that it has been over a year since the coronavirus pandemic started. Due to the collapse of oil prices last year and a general drop in inflation, this year’s data is bound to look positive in comparison, which is hardly an indication of a real economic recovery.
Thus, the Federal Reserve has stated that it will prioritize data about the labor market in the United States over any inflation reports. Unemployment going down is a more convincing sign of the economy healing than a temporary spike in inflation.
Today US stock indices are likely to extend yesterday’s rally on optimism over the gradual reopening of the United States’ economy and the availability of plenty of stimulus funds. A company to keep an eye on is Disney, which is preparing to finally reopen Disneyland, one of its main sources of revenue, for the first time since the pandemic began.
