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The week ahead

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

The 6800 level continues to hold on the FTSE 100, but markets have made little progress all week. Particularly worrying is that the Dow Jones has been unable to hold gains above 16,600, the level that has acted as an upside barrier for nearly six months.

In forex, GBP/USD got within touching distance of $1.70, helped by the services purchasing managers index figures. The euro slumped against the US dollar moments after touching a two and a half year high against the US dollar, as European Central Bank president Mario Draghi indicated that the June ECB meeting might see some form of monetary easing.

Economic reports

Tuesday

China industrial production and retail sales (April), 6.30am: Industrial production rose in March, but we are still below the level of 10% seen in November and December. Meanwhile, retail sales have stabilised from a sub-12% print for February, and are forecast to remain steady around 12.1%. Market to watch: copper, AUD/USD, FTSE 100

German ZEW readings (May), 10.00am: The German confidence readings have shown mixed data of late, but the current situations survey is expected to improve slightly for May. Market to watch: EUR/USD, DAX

US retail sales (April), 1.30pm: Retail sales are expected to weaken from the prior month’s good figure of 1.1%, but we still forecast growth of 0.4%. Given the importance of US consumer spending to the global economy, a good number should bolster markets. Market to watch: dollar crosses

Wednesday

German CPI, final reading (April), 7.00am: This is expected to see another drop in price growth, but only a small shrinkage. Market to watch: EUR/USD

UK unemployment (April), 9.30am: Unemployment dropped to 6.9% in March, below 7% for the first time in five years; another drop, to 6.8%, is expected for April. Market to watch: GBP/USD

BoE inflation report, 10.30am: This is the regular update from the Bank of England regarding expected developments in the coming years for UK inflation. Market to watch: GBP/USD

Thursday

Japan GDP (Q1 preliminary), 0.50am: Quarterly GDP is expected to see 1% growth, a substantial acceleration from a year ago. Market to watch: USD/JPY, Nikkei

Eurozone GDP (Q1 preliminary), and April CPI, 10am: Both of these figures are expected to show increased growth, although eurozone CPI is still low enough to raise the prospect of some form of action from the ECB. Market to watch: EUR/USD

US CPI (April), weekly jobless claims, 1.30pm: A small uptick in CPI, from 0.2% to 0.3%, is expected. Market to watch: dollar crosses

Friday

Eurozone trade balance (March), 10.00am: This measure of imports vs exports in the eurozone saw a trade gap of €15 billion. Market to watch: EUR/USD

US housing starts and building permits (April), 1.30pm: Housing starts are forecast to rise to 983,000 from 946,000 a month earlier, while building permits are projected to accelerate to 1,015,000 from 990,000 in March. Market to watch: dollar crosses

University of Michigan consumer confidence index (May preliminary), 2.55pm: This is expected to increase to 84.5 from a month earlier. Market to watch: dollar crosses

 

Company announcements

Monday

Lonmin

Tuesday

Enterprise Inns, TUI Travel, easyJet

Wednesday

Compass, ICAP, British Land, Macy's, Cisco

Thursday

Vedanta, Thomas Cook, National Grid, Marston’s, Land Securities, JC Penney, Wal-Mart

 

The week is a busy one for UK corporate earnings, with more major names issuing updates this side of the Atlantic, while in the US things have quietened down somewhat. National Grid’s, earnings will be particularly important given that the stock is now just below its 52-week high, around 850p. Catering group Compass is another riser on a long-term basis, although the shares currently trade on a PE of 41, which is well above the median PE of 21.46 for the global food services sector.

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