Skewed or Realistic Perspective?

There is a heavy slate of economic data in the day ahead and that may offer a clearer picture of the real pain from the virus. Markets look to the 5th release of Covid-19-era jobless claims, set to produce a total of +22 mln in the US.The Australian dollar was the top performer Wednesday while the euro lagged on speculation about a larger QE program. There are currently 6 Premium trades, 1 in the red, 1 flat and 3 in the green.

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Perspective is a fluid item and it's always skewed by the person delivering it. What COVID-19 has done has divided the working world into two camps: Those who have lost their jobs and those who haven't.

The problem with perspective is that nearly all the voices we hear: newscasters, economists, market participants, scientists and politicians haven't lost their jobs. That's created an echo chamber in financial markets that makes it easy to suspend disbelief in the pain of the unemployed employed world.

What about the third class of workers? Those in suddenly-precarious jobs. That uncertainty mixed with the fear of the virus is a powerful force and nearly impossible to understand but we suspect it's underestimated. We mention this ahead of the 5th release of Covid-19-era jobless claims from the US, set to produce a cumulative total topping 22 million.

Eventually the data will tell the story. Some measure of short-term pain is priced in but long-term changes are extremely difficult to forecast. The day ahead features a few data points that will begin to clarify a murky picture starting at 0600 GMT with German GfK consumer confidence. That's followed by Markit manufacturing and services surveys for France, German, the UK and USA.

At 1230 GMT, the weekly US initial jobless claims report will be another reminder of the staggering job losses from the virus. The consensus is for another 4.5m losses, following 5.245m a week ago.