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The week ahead

A look ahead to the major events, economic releases and company news expected next week.

The European Central Bank and non-farm payrolls have been the centre of attention in what has been a busy week. Mario Draghi was careful to suggest that the ECB was still alive to the dangers of low inflation, while US job numbers showed a modest recovery from the difficult winter period. Meanwhile, in stock markets, talk of Chinese stimulus buoyed the FTSE 100, pushing it to a three-week high, but the Dow Jones was unable to break firmly above 16,600 despite a broadly encouraging week for US economic figures.

 

Economic reports

Monday

German industrial production, Feb (11am): We expect to see growth of 0.8% in German production, after a week that showed a drop in unemployment. Market to watch: DAX and EUR/USD

Tuesday

Bank of Japan statement (1am): Japan has recently introduced a sales tax, and we will be watching to see if the bank has any comment on how they feel this might affect the national economy. If it feels that the tax might inhibit economic growth, then the bank may opt to boost its quantitative easing programme. Market to watch: USD/JPY, Japan 225

UK industrial/manufacturing production, Feb (9.30am): Further strength in British output could give GBP/USD an additional boost. Manufacturing weakened slightly in March, dropping to its lowest level in eight months. Market to watch: GBP/USD

UK GDP estimate, Mar (3pm): A strong reading here would increase expectations of an earlier rate rise by the BoE. Market to watch: GBP/USD

Wednesday

Federal Reserve minutes, March meeting (7pm): Markets will closely scrutinise the comments made in the minutes of the most recent meeting. If we see a shift in the direction of an earlier than expected rate rise, then the US dollar might make further gains and stock markets could drop back. Market to watch: US indices, USD/JPY & other dollar crosses

Thursday

China exports trade balance exports, Mar (1am): Recent trade figures from China were worryingly weaker, causing nervous jitters in equity markets. Markets to watch: FTSE 100, copper, AUD/USD

Bank of England decision: No change is expected here, as usual, and the main event will be the release of minutes later in the month. Market to watch: GBP/USD

Weekly US jobless claims: These have continued on their positive trend, and Friday’s non-farm figure shows that more Americans continue to find work. Markets to watch: US indices, dollar crosses

Friday

China CPI & PPI, Mar (2.30am): Clues on the health of the Chinese economy are always important, and here we would be looking to see PPI bounce back from the -2% reading seen in February. Market to watch: China A50

German CPI, Mar (7am): Germany is one place in the eurozone where there is certainly no real risk of deflation; at least not yet. But price growth needs to remain healthy lest concerns build around the German economy too. Markets to watch: DAX, EUR/USD

University of Michigan confidence index, April preliminary (2.55pm): US consumer confidence is a particularly key to the recovery, since if Americans feel more confident about their jobs and the economic recovery they may be liable to spend more. Market to watch: US indices, dollar crosses

 

Company announcements

Tuesday

Alcoa

Wednesday

Admiral

Thursday

Vedanta

Friday

WH Smith, Marks & Spencer, JPMorgan, Wells Fargo

 

As well as UK company news, we have the start in earnest of US earnings season. Alcoa takes its traditional place at the head of the parade, and as usual much will be read into the entire season as a result of this one company. The real interest begins with JP Morgan and Wells Fargo, though, which herald the arrival of bank earnings. JP Morgan in particular will be important, given that its mortgage unit will probably have slowed down. However, it recently increased dividends and its earnings continue to run ahead of the broader sector.

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