In our Investment Bank Outlook each week, we bring you a selection of perspectives from leading investment banks to outline the key issues and directional views for the week ahead. These excerpts, taken from research notes, will cover issues such as key market themes, economic releases, as well as any major trends and levels to watch. Please note, this material, which does not reflect the opinions of Tickmill, is provided for educational purposes only and should not be taken as an investment recommendation.

RBC Capital Markets

Week ahead: Focus will be on Russia & Saudi Arabia. CA employment is out on Thu in a holiday-shortened Easter week (see CAD). We look for another 4mn in US jobless claims.

Equities: both CFTC & AAII data point to stabilization in equity sentiment. Again it feels more like a dead cat bounce than a sustainable recovery and we’d be surprised if March 23 ends up being the overall low in the S&P.

CAD: The main question for today’s Business Outlook Survey is how much it will reflect what we already know has been an unprecedented economic shutdown. The normal survey period likely ended sometime in early March, but follow-ups with businesses (that were available) likely gave the BoC some idea of the magnitude of the impact. More so than usual then, the BoC’s commentary should be more informative than the numerical data from the regular questionnaire. The picture going into the disruption was not great anyway, with a sharp decline in capital goods imports through February suggesting poor M&E investment in Q1 before the shutdowns. We expect Thursday’s March employment report to show some of the COVID-19 impact, with the survey week being the first of two that showed about 1 million of jobless claims. We pencil that number in as the expected employment decline in the month and expect a similarly sized fall in April. There is great uncertainty around the number, given persons are typically considered employed if they worked at all in a survey week. For the unemployment rate, we pencil in an even 10%, with similar uncertainty around the final number, but a big jump from 5.6% a foregone conclusion. Hours worked figures to see a collapse alongside the fall in employment.

AUD: The cash rate is set to remain at 0.25% for the foreseeable future. Following the unscheduled 18 March meeting, the key domestic development has been 2 additional fiscal packages worth almost 9% of GDP (see this week’s Total FX for a cross-G10 comparison of fiscal measures). These fiscal measures will take some time to work their way through the economy but, especially the Job Seeker payment, should be impactful. Coupled with unconventional policy being in its early days of operation, we expect little new news on the policy front from the RBA. We may, however, get some colour on how the bond buying program is working, underlying pulse of the economy, and latest assessment of the global outlook.


Risk caught a bid from comments by President Trump and VP Pence pointing to an imminent stabilisation in the growth rate of new cases in hotspots in the US – current cases stand at 335k with 9.5k deaths according to JHU CSSE. According to Trump, “we are seeing things happen [in the data] which are very good.” This comes following prior comments on Saturday that “the country faces a very, very deadly period” over the next two weeks. He was also open to further fiscal stimulus, including a second round of stimulus checks.

  • S&P futures are up over 3.5% to 2571 while USDJPY is approaching 109 (+0.4%). AUD is a particular beneficiary here contrasting with GBP weakness following PM Johnson being hospitalised. Over in EM, we note divergence emerging, with fiscal disappointments and ratings actions weighing down MXN and ZAR respectively. USD-Asia meanwhile has traded quietly with CNH, INR and THB out for holidays. More below.

–    The recovery in the Chinese economy, where there is mixed evidence and some indications of renewed lockdowns in parts of the country, due to ‘second waves.’ Similarly, some other Asian countries are experiencing a renewed rises in cases, such as Hong Kong or Singapore.

–    Indications of when restrictions could begin to be loosened. One of the most important lessons from the 1918 influenza outbreak is that public health measures were key for not only limiting excess deaths but also the likely economic damage. Continued concern about the ability of EMs to deal with the health, economic and financial fallout.

–    Overall, in the short-term we think that market sensitivity to new virus case data will begin to recede, but that the eventual recovery process remains very uncertain and bears risk of major surprises, which for now appear tilted to the downside. We remain bearish GBP even though it mildly outperformed last week. Among risk currencies in G10, we continue to prefer AUD.

Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.

High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% and 70% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.


Share this post: