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Weekly financial market overview 05.04.-11.04.

News - April 12, 2021

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Konstantins Goluzins, CFA



Head of Asset Management
Phone.: (+371) 6700 0456
E-mail: trust@bib.eu

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Main events of the previous week

Last week, International Monetary Fund (IMF) raised its forecast for the global economy again, expecting global GDP to grow by 6% this year. The rate may be the highest since the 1970s, thanks in large part to incentive programs in response to the COVID-19 pandemic. In late January, the IMF predicted that the global economy will grow 5.5% in 2021. The increase in the forecast is largely due to the improved outlook for the US economy. According to the new forecast, the IMF expects the US economy to grow 6.4% in 2021 - the fastest pace since the early 1980s. This is 1.3 percentage points higher than the January forecast. The global economic downturn last year, triggered by the pandemic, was the worst in the post-war period. The fund reported that the global economy contracted 3.3% in 2020. In the January report, the decline was estimated at 3.5%. A recent World Economic Outlook report pointed to a sharp divergence between the outlook for the United States and other countries with the $ 1.9 trillion that Washington gave in economic stimulus. Forecasts for other advanced economies such as Germany, France and Japan have barely improved since January. However, due to the improved outlook for the US, the IMF raised its growth estimate for advanced economies to 5.1% from 4.3%. The IMF highlighted the high degree of uncertainty surrounding the forecasts and the fact that improvements are dependent on success in the fight against the pandemic. The IMF believes that greater progress in vaccination could improve the prognosis, while new strains of the virus that do not respond to vaccines could lead to a sharp decline.

Economic data

US. The number of initial jobless claims for the week was registered in the amount of 744 thousand, which is 16 thousand less than the week before and 64 thousand more than predicted by analysts.

The trade deficit in February reached a record high on record, amounting to $71.1 billion. This increase in the trade deficit was caused by a decrease in exports by 2.55%, while the decrease in imports was only 0.7%.

China. The consumer price index in March fell by 0.5% versus February, while the annual inflation rate was 0.4%.

Key events this week

  • On Tuesday, the US will report on the rise in prices in March, while China will publish data on the trade balance for March.
  • On Wednesday, the Eurozone will publish data on industrial production for the month of February, and the US will publish the change in oil reserves for the previous week.
  • On Thursday, the US will publish retail trade data for March, as well as the number of initial jobless claims for the week.
  • On Friday, data on the trade balance for February and price increases in March will be published in the Eurozone, while China will report on GDP growth in the first quarter, as well as retail trade, industrial production and unemployment for the month of March.

The information provided herewith has an informative nature. This information cannot be regarded as an offer or recommendation for purchase, storage or sale of securities, or as an investment recommendation, an investment survey or a consultation on investments, or a recommendation to entrust management of your assets to the specific investment manager. The Client is fully aware and undertakes all risks involved in the investment. This information is prepared by AS Baltic International Bank.

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