It feels like common sense has long left this planet and people are guided only by emotions. More precisely, a hysteria. No one gives a thing about macroeconomic statistics that almost screams that a new Great Depression is coming. Markets simply ignore unemployment figures and so on. The markets are just ignoring some kind of unemployment numbers and so on. But information about the spread of the coronavirus epidemic is turned by global markets as they want. Almost all day, the quotes stood still, but as soon as it became known that Italy and Spain together surpassed the United States in the number of confirmed cases of coronavirus infection, as well as that Germany on this terrible indicator surpassed China, as soon as the single European currency went down. Moreover, it is noteworthy that the pound is the only one that remained in place. At the same time, a new record for the spread of the epidemic was set in the United States itself, and the number of confirmed cases of coronavirus infection increased by 30.1 thousand. And strangely enough, all this suggests that it only seems that common sense has left humanity. Just the opposite. After all, North America and Europe are the two largest markets in the world. BBut just as important, these are two of the world's largest financial centers of the global economy. Nowhere else in the world is there such a capacious financial market that can accommodate huge masses of capital. In addition, most of the investment capital in the world is controlled by investors from Europe and the United States. Thus, if there is complete confusion in the world and fear takes possession of people's minds, then capital runs to where it is safer and where it can be placed. Safer, of course, at home. Well, only two markets can accommodate this huge amount of money - American and European. But if the global panic does not stop, then these same investors begin to transfer capital from one side of the Atlantic to the other. Back and forth. Specifically, where they feel a little better right now. And the main criterion at this point in time is the coronavirus epidemic. At the same time, oddly enough, there is a certain logic in the market reaction to the data on the labor market in the United States. But first things first.

As already noted, the market repeatedly ignores macroeconomic statistics. However, with regard to British statistics, this is even justified, because the growth rate of the Nationwide issued data on housing prices with a delay of one week, accelerated from 2.3% to 3.0%. Although it seems like they should have slowed down to 2.1%. And not only have the data come out with a strong delay, they are also quite strange, since it is completely unclear why this suddenly in March recorded an acceleration in the growth rate of housing prices. People sit at home and do not go anywhere. And here you are - housing prices are rising. This is only possible if demand increases. But where does it come from now, especially on such an expensive thing as real estate? In other words, the data itself looks quite contradictory, and even considered for a long time. So there is no reaction.

Nationwide Housing Price Index (UK):

European statistics were clearly negative. Another thing is that there is no market reaction again. The single European currency has already gone down noticeably after the US statistics. Nevertheless, the decline in producer prices increased from -0.7% to -1.3%. Moreover, the decline in producer prices has been going on for seven consecutive months. Thus, there is practically no upside potential for inflation. Rather, on the contrary, it will continue to show a downward trend. This means that the European Central Bank may seriously think about the need to reduce the refinancing rate to negative values. For investors, there is nothing good in this thought. In addition, there are signs that the European labor market will not be able to avoid the worst and the same thing will happen to it that happens to the American one. The first alarm bell came from Spain, where the number of unemployed increased by 302.3 thousand. An increase of 45 thousand was projected. In order to understand whether it is a lot or a little, given the difference in population, it is about the same as if in the United States, the number of unemployed increased by about 3 million. So this is a lot. Of course, this is not a record set at the beginning of the 2000s, during the so-called dotcom crisis, but it's still not pleasant enough. Moreover, this time in Spain there is already a high level of unemployment. Moreover, it can now drag on, and the number of unemployed will only continue to grow.

Producer Prices (Europe):

However, all this is against the backdrop of American statistics, which also remained unattended. Okay, you can understand the total bewilderment and misunderstanding of what is happening when you see 3,283 thousand initial applications for unemployment benefits. This has never happened before at least the statistics did not record this. You do not believe your eyes and do not understand what to do and where to run. It is impossible to get rid of the thought that this is a new Great Depression and the like. In short, shock and trepidation, which hold you unconscious and prevent you from doing anything at all. But when you see another 6,648 thousand new applications for benefits in a week, you can completely lose your mind. They expected that there would be only 3,680 thousand. Also a record, and even more than last week. But the reality was so terrifying that it's really hard to understand how to behave in a similar situation. In any case, nearly 10 million Americans lost their jobs in just two weeks. But the latest data was on March 28th. The coronavirus epidemic at this time is raging with might and main. But after this date, the number of confirmed cases of infection only increases with greater speed. And before that, we see a massive increase in unemployment. Consequently, the assumptions that were made exactly a week ago are confirmed - there is a massive bankruptcy of small entrepreneurs in the United States. And this is at the very beginning of the epidemic. Given the sharp increase in the number of initial applications for unemployment benefits, apparently now, the turn has come to medium-sized businesses. The picture is really terrifying, and even much smaller than predicted. The number of repeated applications for unemployment benefits, of which there were 3,029 thousand instead of 4 920 thousand, does not greatly correct the situation. Data on repeated applications for March 21, when there was a sharp surge in the number of initial appeals, can safely bury the hope that the increase in unemployment will be short-term. This is serious and for a long time. And you can convince yourself as much as you like that the number of repeated applications is far from the record values achieved during the 2008-2009 crisis. Then there was no such crazy surge in the number of initial appeals. So, in theory, the dollar should have become cheaper at the speed of sound. But that did not happen. This is partly due to shock and a complete misunderstanding of what is happening. Let's just say that there is nothing like that in the memory of those living now, so no one understands how to behave and what to do. Let's just say that few people imagine what will happen next. At the same time, there is another logic in the fact that the dollar is not getting cheaper. The fact is that the US market is probably the largest in the world. Many countries simply live off exports to the United States. And while unemployment is rising sharply in the United States itself, aggregate demand will begin to decline. If demand decreases, then many manufacturers will be forced to cut jobs and reduce output. So, Donald Trump has long made it clear to everyone that he considers protectionism to be a great thing, and in order for American companies to suffer as little as possible, he can ban the import of goods from other countries. Like, let those Americans who still retain their jobs buy American products. Thanks to this, economic growth can be re-launched. But the trick is that the economic blow will fall on all the rest of the world. At least it will be no less than in the United States itself. Financial and investment capital, which themselves come from the United States, is well aware of this. Thus, it's better to run away in advance to where the consequences may not be so severe, so the trend to strengthen the dollar does not disappear. Well, you can also mention factory orders, which have not changed in a month, although they predicted their growth by 0.2%. As a result, industry in the United States is not in the best condition.

Number of Initial Jobless Claims (United States):

Today, the final data on indexes of business activity in the service sector, as well as composite indices were published. But they will not have any impact on the markets, since everything has already been taken into account at the time of the publication of preliminary estimates. And even if the totals differ slightly from these estimates, the scale of the decline in the indices is so great that it will not do any weather. In principle, even retail sales in Europe, the growth rate of which may accelerate from 1.7% to 1.9%. But this is data for February, while in March, the world changed beyond recognition. In addition, similar data are published for France, where the growth rate of retail sales should accelerate from 2.1% to 2.6%. This, of course, is nice, but nothing changes. At least in the current environment. Similarly, data on industrial production in Spain where the decline slowed from -2.2% to -1.3%. The funny thing in this situation is that they predicted the completion of the recession and an increase of 2.5% year on year. However, it did not work out.

Retail Sales (Europe):

In fact, the only thing that matters today is the content of the report of the United States Department of Labor. This is the report for the month of March. That is, it will reflect the most interesting things that have happened to the labor market during the rapid start of the spread of the coronavirus epidemic in North America. In fact, this very report should dismiss all doubts, hopes and fears, and confirm the fact that the US labor market is rolling into a complete catastrophe. Despite yesterday's data on applications for benefits, no one has revised forecasts, so real data may turn out to be even worse. Nevertheless, the numbers are simply terrifying even without this. The unemployment rate itself should rise from 3.5% to 4.0%. And of course, you can say as much as you like that this is an extremely low figure by world standards, especially in comparison with Europe. But what's scary here is the very scale of growth, which is extremely large and speaks of serious problems. In addition, for the first time since September 2010, in the column "the number of new jobs created outside agriculture" should be a figure with a negative This indicator should change by -150 thousand. The average working week is also not less significant, which can be reduced from 34.4 hours to 34.0 hours. With an equally impressive increase in the number of unemployed, a decrease in the length of the working week means that many of those who have so far kept their jobs have simply switched to part-time jobs. So, they are also at risk in terms of job loss and are about to lose it. In addition, the growth rate of average hourly wages should slow down from 3.0% to 2.9%. In short, it turns out that there is a complete set - rising unemployment, underemployment and lower wages. Just a doomsday party.

The number of new jobs created outside agriculture (United States):

Here, the fun begins. On the one hand, one can understand the absence of a panic reaction to the data on applications for unemployment benefits. This is banal shock. Many refuse to believe what they see. So this is an unrealistic picture. The report of the Ministry of Labor should dispel all thoughts and confirm the worst. After that, the dollar will rapidly lose its position, and the single European currency can grow to 1.0900. Moreover, the content of the report is likely to be worse than forecasts. On the other hand, the principle described above may well work. That is, if everything is so bad in the United States, then it will soon become much worse in other parts of the world. Therefore, you need to save your capital as soon as possible and hide them away. And judging by the fact that the single European currency already demonstrates a desire to reduce, this scenario will most likely work. In this case, the direction opens in the direction of 1.0675.

Events for the pound will develop exactly in the same scenario. In the case of the development of the first scenario, the pound can increase to the level of 1.2525. If a stampede occurs, which is most likely, then the pound will decline in the direction of 1.2050.