[email protected] COVID-19's Anticipated Initial ... · 4/3/2020 · Historical claims...

April 3, 2020

GLOBAL ECONOMICS

| THE GLOBAL WEEK AHEAD

CONTACTS

Derek Holt, VP & Head of Capital Markets Economics

416.863.7707

Scotiabank Economics

[email protected]

1 Visit our website at scotiabank.com/economics | Follow us on Twitter at @ScotiaEconomics | Contact us by email at [email protected]

Chart of the Week

SUPPORT IS ON THE WAY

Canada — Sticker Shock! 2

United States — What More Can The Fed Say? 3

Asia-Pacific — Anything Left? 3–4

Europe — Still Not Flattening 4–5

Latin America — Competing Inflation Effects 5

FORECASTS & DATA

Key Indicators A1–A2

Global Auctions Calendar A3

Events Calendar A4

Global Central Bank Watch A5

Next Week's Risk Dashboard

Chart of the Week: Prepared by: Evan Andrade,

Research Analyst.

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-500

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-200

-100

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Sources: Scotiabank Economics, Statistics Canada.

m/m change,000s

%

COVID-19's Anticipated Initial Impact on the Canadian Labour Market

Scotiabank Forecast

Labour Force Survey Employment, LHS

Unemployment Rate, RHS

OPEC+ call

COVID-19 curves

CDN jobs

FOMC minutes

CDN industry/regional stimulus

CBs: RBA, Korea

Inflation: US, China, Thailand, Philippines…

…Colombia, Chile, Mexico, Brazil

US macro

Asia macro

European macro

BoC’s BOS

https://www.scotiabank.com/ca/en/about/global-economics/economics-publications.html

https://twitter.com/ScotiaEconomics

April 3, 2020

GLOBAL ECONOMICS



Support Is On The Way

CANADA—STICKER SHOCK!

Far and away the most significant development over the coming week could well be Friday’s jobs report. It is likely to be

ugly, and quite possibly shatter not only the prior all-time job loss record but also far exceed the pace of US job losses during the

month in proportionate terms.

The jobs figures that arrive next Friday are from the Labour Force Survey of households. It is roughly conceptually similar to the

US household survey whereas a separate lagging Canadian payrolls survey is more aligned with nonfarm payrolls.

The issue is that the LFS reference week lines up with the week when jobless claims began to soar. The LFS reference

week is the calendar week including the 15th of each month, which in March was a Sunday and hence the start of the full week.

That was the week when the Prime Minister divulged that there was a surge in Employment Insurance (EI) claims received to

929,000 over the March 16th to 22nd period.

Historical claims data is only publicly available on a monthly basis, but chart 1 shows

the connection between them and monthly changes in employment after seasonally

adjusting the claims figures. For instance, when EI claims peaked at 336,000 in

December 2008 on a seasonally unadjusted basis and at least 50% higher than

what would have been a normal run rate for claims that month, job losses equaled

121k in November 2008, -31k in December and the record decline of -125k in

January 2009.

This time around, almost one million claims in a single week that happens to be the

LFS reference week means job losses could easily push into hundreds of thousands

if not a low seven figure print. I haven’t gone that negative at a guesstimate of a half

million jobs lost because of the imperfect connection between the gauges, the

uncertainty toward how households may answer the survey questions, and sampling

noise.

It’s nevertheless imperative to note that assistance is being rolled out.

Stimulus will always lag a sudden shock by nature, and the hardship attached to

payment deferrals or missed obligations is real and unfolding now. Nevertheless, the

Canada Emergency Wage Subsidy (CEWS) and the Canada Emergency Response Benefit (CERB) programs are being rolled out

to provide either increased EI payments to displaced workers or a 75% wage subsidy to employers that keep them, backdated to

mid-March.

Monday’s virtual OPEC+ meeting will pose significant potential risk to the currency and energy sector given uncertainty

surrounding loose discussions to cut oil output by 10 million barrels per day.

The Federal government may introduce targeted assistance aimed at energy-producing regions and especially Alberta and

Saskatchewan, as well as targeted industry support to sectors like energy, airlines and autos. The guidance has been pushed out

over the past couple of weeks as other stimulus efforts were being unveiled that offer assistance to affected workers in those

regions and industries.

The BoC’s Business Outlook Survey may not get much attention at all on Monday. It’s not likely to be a terribly timely

assessment. The Q1 survey period runs roughly over the back half of February and the first half of March and hence significantly

predated much of the rise of the COVID-19 case count in Canada but especially the country’s main export market stateside.

Housing starts for March will probably only begin to show softness based upon lagging effects of prior new home sales.

Canadian bond and stock markets will be shut on Good Friday and bond markets will close early at 1pmET on Thursday.

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72 76 80 84 88 92 96 00 04 08 12 16

Sources: Scotiabank Economics, Statistics Canada.

m/m change, 000s

inv erted, 000s

Canadian Employment & EI Claims

LFS Employment SA, LHS

EmploymentInsurance Claims

Received SA, RHS

Chart 1



April 3, 2020

GLOBAL ECONOMICS



UNITED STATES—WHAT MORE CAN THE FED SAY?

Policy measures will continue to race against the COVID-19 shock over the coming week with few damage assessments likely to

be on offer. Vague discussions toward a ‘phase 4’ stimulus program may combine with Monday’s OPEC+ meeting and subsequent

efforts to offer off-calendar risk.

Wednesday’s minutes to the March 15th FOMC meeting that introduced multiple forms of easing may well be stale on

arrival given the speed of developments (recall recap here). The forward-looking risk will be more focused upon continued

implementation of already announced efforts and the following week’s expected roll-out of the details to the Main Street Business

Lending program. It was at that meeting on the 15th that the Fed cut its fed funds policy rate range by 100bps to 0–0.25%, set the

primary discount rate on top of the upper limit of the fed funds target range, and implemented strong forward guidance while

dismissing negative rates as a policy option and hence explaining part of why the BoC subsequently rejected the option following

earlier support. The FOMC also reintroduced a QE purchase program targeting US$500 billion of Treasuries purchases and

US$200 billion of MBS purchases, before shifting toward open-ended QE on March 23rd. Moral suasion tools were deployed to

encourage banks to borrow from the discount window, and the Fed cut the reserve requirement to 0% and reduced pricing on US$

liquidity swap lines with other central banks.

It’s possible the minutes may include advance discussion of other initiatives that were subsequently rolled out, but even then, the

steps have been clearly communicated and digested by markets. The Fed introduced a Commercial Paper Funding Facility on

March 17th, a Primary Dealer Credit Facility that same day, a Money Market Mutual Fund Liquidity Facility the next day, temporary

USD swap lines with other central banks on the 19th, a Money Market Mutual Fund Liquidity Facility for state and municipal

governments on the 20th, and a repo facility for foreign central banks on the 31st. The announcements on March 23rd, however,

were particularly important as the Fed embraced open-ended QE, established yet more facilities for corporate paper and bonds, a

new ABS TALF facility, a new facility for municipal governments, and announced that it would work toward rolling out a new Main

Street Business Lending Program to lend directly to main street businesses. Any discussion in the minutes on hypothetical

parameters to a main street lending program could be impactful but that’s doubtful.

Data risk will be relatively minor and include the following releases.

JOLTS job openings (Tuesday): They are lagging as a February reading but may have fallen and added to a general

downward trend since the start of 2019;

Jobless claims (Thursday): Weekly claims are likely approaching a peak but not quite there. Another 5–6 million claims is

feasible.

Consumer sentiment (Thursday): The University of Michigan’s consumer sentiment reading for April is likely to nosedive

as it pushes into the peak period of accelerating COVID-19 cases and associated disruptions to the economy and markets.

Inflation: CPI (Friday) should witness a marked deceleration in headline pressures as gasoline costs plummeted, but the

focus will be upon core inflation that may ease but nevertheless reveal variations such as pricing power for pandemic-related

supplies versus the loss of such power for discretionary goods and services. Inertia through regulated price components will set a

floor over coming months. Producer prices (Thursday) are more likely to react swiftly to disinflationary pressures given a large

market-determined component through commodity prices and supply chains.

ASIA-PACIFIC—ANYTHING LEFT?

Do central banks have anything left to give? Two more step up to the plate assuming there will not be further unexpected

announcements from other global central banks.

The Reserve Bank of Australia is the least likely of the two central banks to add additional stimulus. Its cash rate target

already sits at the rock bottom rate of 0.25%. On March 18th, the central bank also introduced other major easing measures

summarized below:



https://www.scotiabank.com/content/dam/scotiabank/sub-brands/scotiabank-economics/english/documents/scotia-flash/scotiaflash20200315.pdf

April 3, 2020

GLOBAL ECONOMICS



It implemented strong forward guidance that the policy rate will remain unchanged

“for some years” that will most likely be three years from now and at least until

inflation and jobs stabilize after the shocks.

It also introduced a three year yield target of around 0.25% in a shorter term version

of the BoJ’s 10 year yield target. So far, the policy is a success but it’s early days

(chart 2).

The RBA also introduced an open-ended government bond buying QE program

across a range of maturities that will start buying tomorrow.

The RBA also set up a collateralized three year funding facility for deposit-taking

institutions at 0.25%.

Further liquidity is being provided by additional repo operations.

Governor Lowe guided that “nothing is off the table” including potentially broader

purchases and FX intervention if needed.

The RBA skipped forecasts, like the Fed.

On top of this, Australia—like Canada—coordinated monetary with fiscal policy stimulus. The latter included about A$80 billion of

measures including cash payments to small businesses and loan guarantees. Australia has also implemented relatively strong

measures to contain the COVID-19 virus such as eliminating all non-essential domestic travel, something the US has so far

decided against.

Since these measures, Australia’s COVID-19 case count has risen to about 5,300 from just 377 in mid-March, and so giving it

about 21 cases per 100,000 people. By comparison, Canada has 31.

Opinions on what the Bank of Korea may do on Thursday are more divided. Most see it holding the seven day repo rate at

0.75% but some expect it to cut to 0.5%. What may be more material is the possible introduction of further loan facilities including

loans to non-bank financial institutions based upon recent comments from Governor Lee Ju-yeol.

The disinflation that is in the early days of being exported from Asia’s factories will get a data boost when China updates

CPI and producer prices (Thursday) after Thailand and Philippines update CPI on Monday.

Because Asia was the epicenter of the first wave of global COVID-19 cases—albeit to

varying degrees by country—its damage assessments are not as stale as macro

readings that are only just rolling in for Europe and North America. We might get foreign

direct investment and aggregate financing figures for March from China either next week

or the week after. Trade figures out of Australia (Monday), Philippines (Tuesday) and

Malaysia (Friday) will further inform global supply chain disruptions. India has seen the

COVID-19 effects somewhat later than other parts of Asia but industrial output arrives on

Thursday. Japanese household spending could follow retail sales higher for the same

month.

EUROPE—STILL NOT FLATTENING

There is nothing by way of calendar-based risks that is likely to materially impact the

market tone. The outcome of Monday’s OPEC+ meeting and continued monitoring of the

COVID-19 case counts will dominate. Chart 3 shows little evidence of curve flattening in

Europe thus far.

Chart 2

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Early Prognosis on theRBA's Yield Target

3 y r y ield, %

Sources: Scotiabank Economics, Bloomberg.

RBA introduces 0.25% 3y r Yield

Target

Chart 3

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Feb Mar Apr

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France

Germany

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Switzerland

Sources:Scotiabank Economics, Johns Hopkins University.

Cumulative COVID-19

cases, 000s



April 3, 2020

GLOBAL ECONOMICS



Macro releases will focus upon German and UK figures. Expect stiff retrenchments in German factory orders (Monday), industrial

output (Tuesday) and exports (Thursday) but only the beginning of the adjustments as they will cover the month of February. The

UK figures will similarly inch closer to the accelerated downdraft expected across multiple economies when Thursday brings out

updates for industrial output, a services index, trade and monthly GDP.

LATIN AMERICA—COMPETING INFLATION EFFECTS

A wave of diminishing inflation readings will only begin to inform disinflationary pressures across the region while the

COVID-19 case count continues to rise in per capita terms (chart 4).

Each of Colombia (this weekend), Mexico (Tuesday), Chile (Wednesday) and Brazil (Thursday) will update inflation readings for

February. General downward pressure is expected, but March may bring forth more of that in light of accelerated declines in

energy prices. Central banks across the region have already been acting to ease in advance of disinflationary pressures through

falling commodity prices and the impact of social distancing that is being unevenly applied across the region with Mexico lagging

behind the practice compared with most others. The impact of currency depreciation given dollar strength poses offsetting risk of

imported inflation (chart 5). Clients may also be interested in this Latam Weekly from our large team of local market specialists.

Chart 5

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Brazilian Real

Mexican Peso

Colombian Peso

Chilean Peso

Argentine Peso

Peruvian Sol

Sources: Scotiabank Economics, Bloomberg.

% change vs. USD since Dec. 31, 2019

LatAm's Currency Depreciation

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Sources: Scotiabank Economics, Johns Hopkins University, Haver

Cumulative COVID-19 Cases Per Capitacases per 100,000

Chart 4



https://www.scotiabank.com/content/dam/scotiabank/sub-brands/scotiabank-economics/english/documents/latam-weekly/latamweekly_2020-04-03.pdf

April 3, 2020

GLOBAL ECONOMICS



Key Indicators for week of April 6 – 10

NORTH AMERICA

Forecasts at time of publication. Sources: Bloomberg, Scotiabank Economics.

A1

EUROPE

Country Date Time Indicator Period BNS Consensus Latest

CA 04/06 10:00 Business Outlook Future Sales 1Q -- -- 11.0

MX 04/07 07:00 Bi-Weekly Core CPI (% change) Mar 31 0.2 0.1 0.2

MX 04/07 07:00 Bi-Weekly CPI (% change) Mar 31 -0.3 -0.5 0.1

MX 04/07 07:00 Consumer Prices (m/m) Mar 0.2 0.1 0.4

MX 04/07 07:00 Consumer Prices (y/y) Mar 3.5 3.4 3.7

MX 04/07 07:00 Consumer Prices Core (m/m) Mar 0.3 0.3 0.4

US 04/07 10:00 JOLTS Job Openings (000s) Feb -- -- 6963

US 04/07 15:00 Consumer Credit (US$ bn m/m) Feb -- 14.0 12.0

MX 04/08 07:00 Industrial Production (m/m) Feb -- -- 0.3

MX 04/08 07:00 Industrial Production (y/y) Feb -- -- -1.6

US 04/08 07:00 MBA Mortgage Applications (w/w) Apr 3 -- -- 15.3

CA 04/08 08:15 Housing Starts (000s a.r.) Mar 180 150.0 210.1

CA 04/08 08:30 Building Permits (m/m) Feb -- -2.0 4.0

CA 04/09 08:30 Employment (000s m/m) Mar -500 -350.0 30.3

CA 04/09 08:30 Unemployment Rate (%) Mar 7.1 7.3 5.6

US 04/09 08:30 Initial Jobless Claims (000s) Apr 4 5500 5000 3283

US 04/09 08:30 Continuing Claims (000s) Mar 28 -- -- 1803

US 04/09 08:30 PPI (m/m) Mar -0.5 -0.4 -0.6

US 04/09 08:30 PPI ex. Food & Energy (m/m) Mar 0.0 0.0 -0.3

US 04/09 10:00 U. of Michigan Consumer Sentiment Apr P 73 75.0 89.1

US 04/09 10:00 Wholesale Inventories (m/m) Feb F -- -0.5 -0.5

US 04/10 08:30 CPI (m/m) Mar -0.3 -0.3 0.1

US 04/10 08:30 CPI (y/y) Mar 1.7 1.6 2.3

US 04/10 08:30 CPI (index) Mar -- 258.2 258.7

US 04/10 08:30 CPI ex. Food & Energy (m/m) Mar 0.1 0.1 0.2

US 04/10 08:30 CPI ex. Food & Energy (y/y) Mar 2.4 2.3 2.4


GE 04/06 02:00 Factory Orders (m/m) Feb -- -2.5 5.5

UK 04/06 04:30 PMI Construction Mar -- 44.0 52.6

GE 04/07 02:00 Industrial Production (m/m) Feb -- -0.8 3.0

FR 04/07 02:45 Current Account (€ bn) Feb -- -- -2829

FR 04/07 02:45 Trade Balance (€ mn) Feb -- -5116 -5887

GE 04/09 02:00 Current Account (€ bn) Feb -- 17.0 16.6

GE 04/09 02:00 Trade Balance (€ bn) Feb -- 16.3 13.8

UK 04/09 02:00 Index of Services (m/m) Feb -- 0.2 0.1

UK 04/09 02:00 Industrial Production (m/m) Feb -- 0.1 -0.1

UK 04/09 02:00 Manufacturing Production (m/m) Feb -- 0.1 0.2

UK 04/09 02:00 Visible Trade Balance (£ mn) Feb -- -6000 -3720

IT 04/09 04:00 Industrial Production (m/m) Feb -- -1.9 3.7

FR 04/10 02:45 Industrial Production (m/m) Feb -- 0.0 1.2

FR 04/10 02:45 Industrial Production (y/y) Feb -- -2.3 -2.8

FR 04/10 02:45 Manufacturing Production (m/m) Feb -- 0.2 1.2



April 3, 2020

GLOBAL ECONOMICS



Key Indicators for week of April 6 – 10

ASIA-PACIFIC


A2

LATIN AMERICA


AU 04/05 21:30 ANZ Job Advertisements (m/m) Mar -- -- 0.7

SK 04/06 19:00 Current Account (US$ mn) Feb -- -- 1007

JN 04/06 19:30 Household Spending (y/y) Feb -- -3.3 -3.9

JN 04/06 19:50 Official Reserve Assets (US$ bn) Mar -- -- 1359.0

PH 04/06 21:00 CPI (y/y) Mar 2.5 2.4 2.6

CH 04/06 21:00 Foreign Reserves (US$ bn) Mar -- 3096 3107

AU 04/06 21:30 Trade Balance (AUD mn) Feb -- 3750 5210

TH 04/06 23:30 CPI (y/y) Mar 0.6 -0.6 0.7

TH 04/06 23:30 Core CPI (y/y) Mar -- 0.5 0.6

ID 04/06 Consumer Confidence Index Mar -- -- 117.7

AU 04/07 00:30 RBA Cash Target Rate (%) Apr 7 0.25 0.25 0.25

JN 04/07 01:00 Coincident Index CI Feb P -- 95.8 95.2

JN 04/07 01:00 Leading Index CI Feb P -- 92.0 90.5

AU 04/07 02:30 Foreign Reserves (AUD bn) Mar -- -- 83.6

MA 04/07 03:00 Foreign Reserves (US$ bn) Mar 31 -- -- 103.0

SI 04/07 05:00 Foreign Reserves (US$ mn) Mar -- -- 282995

JN 04/07 19:50 Current Account (¥ bn) Feb -- 3067 612

JN 04/07 19:50 Machine Orders (m/m) Feb -- -2.9 2.9

JN 04/07 19:50 Trade Balance - BOP Basis (¥ bn) Feb -- 1214 -985

PH 04/07 21:00 Exports (y/y) Feb -- 3.0 9.7

PH 04/07 21:00 Imports (y/y) Feb -- 2.6 1.0

PH 04/07 21:00 Trade Balance (US$ mn) Feb -- -2849 -3499

TA 04/08 04:00 CPI (y/y) Mar -0.1 0.2 -0.2

TA 04/08 04:00 Exports (y/y) Mar -- -1.4 24.9

TA 04/08 04:00 Imports (y/y) Mar -- -3.9 44.7

TA 04/08 04:00 Trade Balance (US$ bn) Mar -- 3.3 3.3

SK 04/08 20:00 BoK Base Rate (%) Apr 9 0.50 0.75 0.75

TH 04/08 23:30 Consumer Confidence Economic Mar -- -- 52.5

JN 04/09 01:00 Consumer Confidence Mar -- 35.0 38.4

JN 04/09 02:00 Machine Tool Orders (y/y) Mar P -- -- -29.6

IN 04/09 08:00 Industrial Production (y/y) Feb -- -- 2.00

JN 04/09 19:50 Bank Lending (y/y) Mar -- -- 2.1

CH 04/09 21:30 CPI (y/y) Mar 4.8 4.9 5.2

CH 04/09 21:30 PPI (y/y) Mar -- -1.1 -0.4

MA 04/10 00:00 Industrial Production (y/y) Feb -- 0.9 0.6

MA 04/10 00:00 Exports (y/y) Feb -- -- -1.5

MA 04/10 00:00 Imports (y/y) Feb -- -- -2.4

MA 04/10 00:00 Trade Balance (MYR bn) Feb -- -- 12.0

CH 04/10 New Yuan Loans (bn) Mar 1800 1800 906


CO 04/04 13:00 Consumer Price Index (m/m) Mar 0.1 0.4 0.7

CO 04/04 13:00 Consumer Price Index (y/y) Mar 3.4 3.7 3.7

BZ 04/07 08:00 Retail Sales (m/m) Feb -- -0.5 -1.0

BZ 04/07 08:00 Retail Sales (y/y) Feb -- 2.4 1.3

BZ 04/09 08:00 IBGE Inflation IPCA (m/m) Mar -- 0.1 0.3

BZ 04/09 08:00 IBGE Inflation IPCA (y/y) Mar -- 3.4 4.0

BZ 04/09 Economic Activity Index NSA (y/y) Feb -- 0.3 0.7



April 3, 2020

GLOBAL ECONOMICS



Global Auctions for week of April 6 – 10

Sources: Bloomberg, Scotiabank Economics.

A3

ASIA-PACIFIC

NORTH AMERICA

EUROPE

Country Date Time Event

US 04/07 13:00 U.S. to Sell 3-Year Notes

CA 04/08 12:00 Canada to Sell 2 Year Bonds

US 04/08 13:00 U.S. to Sell 10 Year Notes Reopening

CA 04/09 12:00 Canada to Sell 5 Year Bonds

US 04/09 13:00 U.S. to Sell 30 Year Notes Reopening


UK 04/07 05:00 U.K. to Sell 3.25 Billion Pounds of 0.125% 2023 Bonds

AS 04/07 05:15 Austria to Sell 4 & 10 Year Bonds

GE 04/07 05:30 Germany to Sell I/L Bonds

UK 04/07 06:30 U.K. to Sell 1.25 Billion Pounds of 1.75% 2057 Bonds

SZ 04/08 05:15 Switzerland to Sell Bonds

GE 04/08 05:30 Germany to Sell 4 Billion Euros of 0% 2030 Bonds

UK 04/08 05:30 U.K. to Sell 5 & 10 Year Bonds

IT 04/09 05:00 Italy to Sell Bonds


SK 04/05 22:30 Korea to Sell KRW 2.2 Trillion 5-Year Bond

JN 04/06 23:35 Japan to Sell 30-Year Bonds

CH 04/07 02:00 Sichuan to Sell 7 & 10 Year Bonds

ID 04/07 05:00 Indonesia to Sell 2, 4, 15, & 25 Year Islamic Bonds

CH 04/07 23:00 China Plans to Sell 2 & 5 Year Upsized Government Bond

NZ 04/08 22:05 New Zealand To Sell 5, 7, & 13 Year Bonds

JN 04/08 23:35 Japan to Sell 5 Year Bonds

SK 04/09 22:30 Korea to Sell KRW 750 Bln 50 Year Bonds

CH 04/09 23:00 China Plans to Sell 30 Year Upsized Government Bonds



April 3, 2020

GLOBAL ECONOMICS



Events for week of April 6 – 10

Sources: Bloomberg, Scotiabank Economics.

A4

NORTH AMERICA

EUROPE

ASIA-PACIFIC


US 04/04 Alaska Democratic Primary

US 04/04 Hawaii Democratic Primary

US 04/04 Louisiana Primaries

US 04/04 Wyoming Democratic Caucuses

CA 04/06 10:00 BoC Business Outlook Future Sales

US 04/07 Wisconsin Primaries

MX 04/08 10:00 Central Bank Monetary Policy Minutes

US 04/08 14:00 FOMC Meeting Minutes


SW 04/06 05:45 Riksbank weekly extraordinary market operation

IT 04/07 Bank of Italy Report on Balance-Sheet Aggregates

SW 04/09 05:30 Riksbank 2-yr loan auction


AU 04/07 00:30 RBA Cash Rate Target

SK 04/08 20:00 BoK 7-Day Repo Rate

AU 04/08 21:30 RBA Financial Stability Review



April 3, 2020

GLOBAL ECONOMICS



Global Central Bank Watch


A5

NORTH AMERICA

Rate Current Rate Next Meeting Scotia's Forecasts Consensus Forecasts

Bank of Canada – Overnight Target Rate 0.25 April 15, 2020 0.25 0.25

Federal Reserve – Federal Funds Target Rate 0.25 April 29, 2020 0.25 0.25

Banco de México – Overnight Rate 6.50 May 14, 2020 6.00 5.75

EUROPE


European Central Bank – Refinancing Rate 0.00 April 30, 2020 0.00 0.00

European Central Bank – Marginal Lending Facility Rate 0.25 April 30, 2020 0.25 0.25

European Central Bank – Deposit Facility Rate -0.50 April 30, 2020 -0.50 -0.50

Bank of England – Bank Rate 0.10 May 7, 2020 0.10 0.10

Swiss National Bank – Libor Target Rate -0.75 TBA -0.75 -0.75

Central Bank of Russia – One-Week Auction Rate 6.00 April 24, 2020 6.00 6.00

Sweden Riksbank – Repo Rate 0.00 April 28, 2020 0.00 0.00

Norges Bank – Deposit Rate 0.25 May 7, 2020 0.25 0.00

Central Bank of Turkey – Benchmark Repo Rate 9.75 April 22, 2020 9.00 9.00

ASIA PACIFIC


Bank of Japan – Policy Rate -0.10 April 28, 2020 -0.10 -0.10

Reserve Bank of Australia – Cash Target Rate 0.25 April 7, 2020 0.25 0.25

Reserve Bank of New Zealand – Cash Rate 0.25 May 12, 2020 0.25 0.50

People's Bank of China – 1-Year Loan Prime Rate 4.05 April 20, 2020 3.95 3.85--

Reserve Bank of India – Repo Rate 4.40 TBA 4.15 4.00

Bank of Korea – Bank Rate 0.75 April 9, 2020 0.50 0.75

Bank of Thailand – Repo Rate 0.75 May 20, 2020 0.50 0.75

Bank Negara Malaysia – Overnight Policy Rate 2.50 May 5, 2020 2.25 2.50

Bank Indonesia – 7-Day Reverse Repo Rate 4.50 April 14, 2020 4.25 4.50

Central Bank of Philippines – Overnight Borrowing Rate 3.25 May 21, 2020 3.00 3.50

LATIN AMERICA


Banco Central do Brasil – Selic Rate 3.75 May 6, 2020 3.75 3.50

Banco Central de Chile – Overnight Rate 0.50 May 6, 2020 0.50 0.75

Banco de la República de Colombia – Lending Rate 3.75 April 30, 2020 3.50 4.00

Banco Central de Reserva del Perú – Reference Rate 1.25 April 16, 2020 0.75 1.00

AFRICARate Current Rate Next Meeting Scotia's Forecasts Consensus Forecasts

South African Reserve Bank – Repo Rate 5.25 May 21, 2020 5.00 5.00

Reserve Bank of Australia (RBA): Australian monetary authorities will hold a monetary policy meeting on April 7. We expect the RBA to leave the

benchmark interest rate unchanged at 0.25%, given that substantial monetary stimulus measures were unveiled at the additional policy announcement on

March 19 when the RBA reduced the benchmark cash rate by 25 bps to 0.25% and adopted yield targeting that aims to keep the 3-year Australian

government bond yield at around 0.25%.

Bank of Korea (BoK): South Korea monetary policymakers will meet on April 9. Following an extra monetary policy meeting on March 16, the BoK slashed

the benchmark interest rate by 50 bps to 0.75% and announced measures to stabilize financial conditions. Given substantial weakness in economic

activity, we assess that another rate cut – of 25 bps to 0.50% – is in sight in Q2. While there is uncertainty regarding the timing of the cut, we assess that

prompt action already at the April 9 meeting is the most likely outcome.



April 3, 2020

GLOBAL ECONOMICS


This report has been prepared by Scotiabank Economics as a resource for the clients of Scotiabank. Opinions, estimates and projections

contained herein are our own as of the date hereof and are subject to change without notice. The information and opinions contained herein

have been compiled or arrived at from sources believed reliable but no representation or warranty, express or implied, is made as to their

accuracy or completeness. Neither Scotiabank nor any of its officers, directors, partners, employees or affiliates accepts any liability whatsoever

for any direct or consequential loss arising from any use of this report or its contents.

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