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- March 26, 2020
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The US Senate voted unanimously to approve to $2 trillion stimulus package to combat the economic impact of Covid-19. It includes business loans and direct payments to individuals.
The House of Representatives is scheduled to vote on it on Friday. Market reaction was limited, as risk assets had already rallied in anticipation.
Official UK February retail sales figures were released at 7am this morning. They showed underlying sales (excluding fuel) a tad softer than expected, falling by 0.5m/m, although the previous month was revised up to 1.8% from 1.6%. The ONS said sales were largely unaffected by the coronavirus, although the record rainfall may have hampered activity.
The Bank of England is expected to keep its policy settings unchanged today (12:00GMT) at its regular meeting and to take stock of a raft of measures announced over the past two weeks. The minutes of the MPC meeting and last week’s special MPC meeting will be published.
While no policy change is anticipated today, the BoE will reiterate it stands ready to do more, if necessary. Separately, the UK government is expected to announce measures to support the self-employed.
Outside the UK, the principal focus will be on US weekly jobless claims data for the week ending 21 March. They are expected to soar to over a million.
That would be well above even the peak level (665k) during the global financial crisis. We forecast a rise to 1100k, while the consensus median forecast is 1500k. Next week’s March nonfarm payrolls will be closely watched, although the survey date was too early in the month to capture the main impact of the shutdown.