Key Events In The Coming Week: All About Earnings And The ECB

As Jim Reid summarizes events over the next five days, there’s a reasonably eventful calendar for markets this week, with the highlights including Thursday’s ECB meeting and Friday’s release of the April flash PMIs from around the world. Investors will also be paying attention to the latest earnings releases, with a further 80 S&P 500 companies reporting, as well as the continued path of the pandemic as a number of places such as India have faced a big surge in cases. There have been around 5.1mn cases reported across the globe over the past 7 days, the highest weekly increase since the pandemic began. India contributed north of 1.4mn cases to this increase which is also its largest weekly gain and continues to remain the current epicenter of the virus. Elsewhere both Osaka and Tokyo may go into a fresh state of emergency conduction as soon as today. On a more positive note, Fauci said that he expects a decision on how to resume vaccinating Americans with the J&J COVID-19 vaccine will probably come by Friday and added that “I doubt very seriously if they just cancel” the J&J vaccine. We wonder if the people who chose the J&J vaccine will fly to their vaccination spot using a 737 MAX.

From central banks, this week’s highlight will be the latest ECB decision on Thursday, along with President Lagarde’s subsequent press conference. In their preview, Deutsche Bank's European economists write that a change in the policy stance is unlikely and that a decision on whether or not to maintain the new faster pace of PEPP purchases will be made after a joint assessment of financing conditions and the inflation outlook at the Governing Council’s next monetary policy meeting in June. However, at this point, it’s unclear whether they will maintain that higher pace beyond June. Although a latent recovery is building and ‘net-net’ issuance (net issuance, net of ECB purchases) ought to turn favorable for rates markets following the Q1 spike, the ECB consensus is cautious and determined to avoid a premature tightening in financing conditions.

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