Brazil reports central government budget data Monday, where a -BRL18 bln primary deficit is expected. Consolidated budget data will be reported Tuesday, where a -BRL14.7 bln primary deficit is expected. President Bolsonaro continues to downplay the risks of the coronavirus, but Congress was able to approve an aid package for workers that will likely be around BRL44 bln. February tax collections will be reported sometime this week. As the crisis widens and the economy stumbles, the fiscal numbers are likely to deteriorate significantly. February IP (-2.3% y/y expected) and March trade data will be reported Wednesday.
Colombia central bank minutes will be released Monday. At last week’s meeting, the bank cut rates 50 bp to 3.75%, as expected. The bank said it has room to cut rates further if necessary, and announced it would take more steps to boost liquidity by auctioning FX swaps and NDFs. Colombia reports March CPI Saturday, with inflation expected to remain steady at 3.72% y/y. Even though inflation is near the top of the 2-4% target band, it’s clear that growth concerns have taken precedence.
Chile central bank meets Tuesday and markets are split. Some analysts expect steady rates while others expect another rate cut. The bank just delivered an emergency 75 bp cut two weeks ago and boosted its FX swaps program. Last week, it eased some rules in order to help boost liquidity and support credit flow to homes and businesses. There is a case for not moving again so soon, and yet the economic outlook has worsened sharply. We lean towards a cut. Earlier that day, Chile reports February retail sales and IP.
South Africa reports February money and private sector credit data Monday. SARB delivered an unexpectedly large 100 bp two weeks ago and banking regulators last week announced plans to ease some accounting and capital rules that could release around ZAR300 mln for lending. Trade data will be reported Tuesday. As we have long expected, Moody’s downgraded the sovereign rating by a notch to Ba1 and kept the negative outlook. The move to sub-investment grade will lead to some forced selling, as South Africa will now be ejected from WGBI.
Turkey reports February trade data Tuesday, with a deficit of -$3.05 bln expected. March CPI will be reported Friday, with inflation expected to ease to 11.85% y/y from 12.37% in February. If so, this would be the first deceleration since October but inflation would still remain well above the 3-7% target band. This hasn’t prevented the central bank from continuing its easing cycle. The last move was a 100 bp cut to 9.75%, pushing real rates further into negative territory. Next policy meeting is April 22 and another cut seems likely.
Poland reports March CPI Tuesday, with inflation expected to ease to 4.4% y/y from 4.7% in February. If so, this would be the first deceleration since October but inflation would still remain well above the 1.5-3.5% target band. The central bank just delivered an emergency 50 bp cut to 1.0% on March 17. Next regularly scheduled policy meeting is April 8 and another cut then seems too soon, as policymakers will want to gauge the impact of its asset purchase program before moving again.
Russia reports Q4 GDP Wednesday. The economy was already suffering from low oil prices last year, and further losses this year will lead to additional stresses. Inflation remains well below target, but the plunging ruble led the central bank to keep rates steady at 6.0% this month. The domestic impact of the coronavirus appears to be rising too, as Russia belatedly closes its borders starting Monday. In a sign of rising concern, President Putin announced that the constitutional referendum would be postponed until the coronavirus situation has improved.
Monetary Authority of Singapore holds its semiannual meeting Monday and is expected to ease. The meeting was moved up from early April. The MAS is likely to loosen policy by adjusting its S$NEER trading band. This could take the form of either re-centering, widening, flattening, or some combination thereof. February retail sales (-7.5% y/y expected) and March PMI will be reported Friday. Despite limiting the spread of the coronavirus domestically, Prime Minister Lee warned that the nation faces a “very grave situation” due to risks of a second wave of infections.
Korea reports February IP Tuesday, which is expected to rise 3.0% y/y vs. -2.4% in January. This is a statistical quirk and not indicative of any sort of recovery. March trade data will be reported Wednesday, with exports expected to rise 0.8% y/y and imports by 0.3% y/y. March CPI will be reported Thursday, with inflation expected to ease to 0.8% y/y form 1.1% in February. North Korea fired two short-range ballistic missiles into the sea over the weekend but got scant attention.
China reports official March PMI readings Tuesday. Manufacturing is expected to rise to 45.0 from 35.7 in February, while non-manufacturing is expected to rise to 42.0 from 29.6 in February. Caixin reports China March manufacturing PMI Wednesday, which is expected to rise to 45.0 from 40.3 in February. Caixin then reports services and composite PMIs Friday, with the former expected to rise to 39.5 from 26.5 in February. Markets will be watching to see how quickly China can get its factories up and running again. Now that domestic infections have basically come to stop, China over the weekend blocked almost all foreigners from entering the country.
Hong Kong reports February retail sales Tuesday, which are expected to contract -33.3% y/y in volume terms vs. -23.0% in January. The territory was already in a weakened state due to the ongoing protests and now the coronavirus is just adding to the headwinds. After a record surge in infections over the weekend, the government announced immediate restrictions on social gatherings and closed cinemas, gyms, and arcades.
Indonesia reports March CPI Wednesday, with inflation expected to remain little changed at 2.96% y/y vs. 2.98% in February. If so, inflation would remain in the bottom half of the 2.5-4.5% target range. Bank Indonesia just delivered a 25 bp cut to 4.5% this month. Next policy meeting is April 14 and another cut is expected. The economic numbers are going to get worse as the government appears ready to lock down Jakarta, affecting almost 30 mln people.