Collapse in US jobs

The euro lost ground against the dollar over the course of last week, ending not much above $1.08 having closed at $1.10 the previous Friday. Sterling shed around 1 cent or so against the US currency to finish at $1.24, which left it a touch firmer on the week against the euro at 87p. Core bond yields rose with US and German 10-year yields respectively about 10bps and 5bps higher at 0.69% and -0.55%, while equity markets finished on a positive note as both US and European stocks chalked up gains on Friday

Employment in the US collapsed in April according to Friday’s payrolls report, falling by 20.5 million from March, while the unemployment rate rose to 14.7% (from 4.4%) and has almost certainly further to rise. President Tump said the job numbers were “not a surprise”, while also insisting they were not “his fault”

Estimates from regional Fed banks point to a decline in GDP in the US – based on actual data currently to hand – of the order of 10% in the second quarter of this year (from Q1). These estimates will be updated as more data are published and could yet indicate an even larger decline

ECB President Christine Lagarde says it is “highly desirable” that European politicians come up with a common response to the crisis caused by COVID-19 and called for a “swift, sizable and symmetrical” policy instrument to fund economic recovery

The European Court of Justice (ECJ’s) has responded to last week’s German Constitutional Court ruling on the ECB’s bond purchases, which also took issue (to say the least) with the ECJ’s previous ruling on the matter, with the latter pointedly noting that it “alone…has jurisdiction to rule that an act of an EU institution is contrary to EU law”

Data due this week includes Euro area GDP and employment for QI 2020 on Friday; UK GDP for the first quarter on Wednesday; and in the US, CPI inflation tomorrow (Tuesday) and retail sales and industrial production on Friday, all of which are for the month of April