The contraction in the first quarter in both UK and Germany will pale into insignificance compared with the crash coming in the second quarter
The moments when Germany and the U.K. each precipitated into an economic freefall will be revealed this week in gross domestic product data giving an initial glimpse of the carnage to come.
Those statistics for the first three months of the year show how lockdowns imposed in both countries in March to contain the coronavirus caused activity to seize up before inflicting a toll on prosperity that may last years.
Germany, Europe's biggest economy, is seen shrinking 2.3% in that quarter, its worst performance since the global financial crisis in 2009. For Britain, the 2.5% contraction anticipated by economists will drag back memories even further. That drop would be the biggest since 1974, when labor strikes forced the nation to adopt a three-day week.
Both of those outcomes are just a taste of what's in store. Germany's government expects its economy to shrink the most since World War II this year, with a 6.3% contraction. Meanwhile, the Bank of England last week predicted an even more eye-watering GDP crash of 14%. That would be a result far beyond the memories of anyone alive, being the worst since 1706, the year when England and Scotland were unified into a single country during the reign of Queen Anne.
US and Canada
US investors will be on the lookout for the latest data on prices, retail sales, small businesses and industrial production. Figures on manufacturing in New York will also provide one of the first readouts of the industry's performance in May.
Weekly jobless claims figures will stretch into the eighth week since large swaths of the U.S. economy shuttered. On Thursday, the number of Americans filing for unemployment benefits topped 3 million for a seventh straight week.
Federal Reserve Chairman Jerome Powell will discuss current economic issues via a webinar on Wednesday. That's the day after Fed Vice Chair Randal Quarles testifies before the Senate Banking Committee on supervision and regulation. Regional Fed presidents including James Bullard, Patrick Harker, Loretta Mester, Raphael Bostic, Neel Kashkari and Robert Kaplan are also scheduled to speak this week.
On Thursday, Bank of Canada Governor Stephen Poloz holds his last press conference before his term ends.
Europe, Middle East and Africa
Virtual appearances and online speeches by policy makers from the European Central Bank, BOE and Nordic policy makers will likely seek to reassure markets that central banks stand ready to do more to support the economy. In addition to German and U.K. GDP data, first-quarter output figures are also due for the Netherlands, Norway, Cyprus and across eastern Europe. The second release of euro-area GDP on Friday may record a downward revision, according to Bloomberg Economics -- the first release showed a contraction of 3.8%.
Turkey will publish unemployment, current account, industrial production and budget data. While unemployment data for February won't reflect the impact of virus-related shutdowns on the economy, the budget is likely to show continued bleeding in April as measures to slow the outbreak hit tax income. The government's stimulus packages largely consisted of tax deferrals to help businesses ride out the economic storm, which will chip away at revenues.
Analysts expect Egypt to keep its main interest rate unchanged on Thursday, after making its biggest-ever cut in March. Ghana's central bank will probably continue the easing it started in March on Friday, with inflation that's been unchanged below the midpoint of the target band for three straight months and economic growth projected at a 37-year low.
New Zealand's central bank will meet to set policy on Wednesday and employment data in Australia on Thursday is set to show a massive surge in joblessness. Chinese data on retail sales, investment and industrial production for April will be closely watched on Friday amid increasing evidence the domestic economy is beginning to recover while sectors exposed to external demand face headwinds from slumping global growth and virus lockdowns.
In Latin America this week, Brazil's central bank on Tuesday posts the minutes of last week's meeting where it lowered the key rate to a record-low 3%. Following the bigger-than-expected cut and a commitment to push lower in June, policy makers said the economy needs an "unusually large monetary stimulus" as the pandemic hammers the region's biggest economy.
On Thursday, Mexico's central bank is expected to cut its key rate by a half-point to a still-restrictive 5.5%, following similar reductions at unscheduled meetings in March and April. With a deep recession forecast for 2020, some board members have urged the government to boost its fiscal stimulus -- Mexico's is the region's smallest by IMF reckoning -- to complement their monetary easing but President Andre Manuel Lopez Obrador remains unmoved.
Disclaimer: This article first appeared on Bloomberg.com, and is published by special syndication arrangement.