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The week ahead

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

It has been a choppy week for markets, with the FTSE 100 underperforming noticeably vis-à-vis its peers. US indices are moving upwards again, and the spike in the Russell 2000 is a welcome indicator that this small cap market is registering an improvement. For the FTSE the week has been clouded by gyrations in the market value of AstraZeneca, as another bid from Pfizer was rejected. It seems the US drug company is not likely to go hostile before the 26 May deadline, meaning it would have to wait six months before trying again.

The Bank of England’s minutes showed that disagreement on the Monetary Policy Committee is on the increase, as UK economic data indicated continued strength. The debate now builds on when the BoE will finally move on rates. Meanwhile, the Federal Reserve’s latest set of minutes were viewed in a broadly dovish light, and the US central bank still thinks more needs to be done on forward guidance to reassure markets about the likely timing and pace of rate increases.

The week ahead sees long weekends for the UK and US and, while the world does not stop for this, markets will be quieter on Monday.

Economic reports

Tuesday

US durable goods orders (April), 1.30pm: These are expected to drop by 0.7% month-on-month, from 2.6% growth in March. Market to watch: EUR/USD, GBP/USD, Dow Jones, S&P 500

S&P/Case-Shiller house price index (March), 2pm: This survey of house prices in 20 US cities is forecast to show growth of 0.7% for the month, with 11.85% year-on-year growth. Market to watch: EUR/USD, GBP/USD, Dow Jones, S&P 500

US Markit composite & services PMI (May), 2.45pm: These aid in tracking US economic performance for the month, covering the services industry and a composite of the services and manufacturing readings. Market to watch: EUR/USD, GBP/USD, Dow Jones, S&P 500

US Richmond Federal Reserve manufacturing index (May), 3pm: This index measures growth in manufacturing in the south-east US, with a reading of four expected from seven last month. Market to watch: EUR/USDGBP/USDDow Jones, S&P 500

Wednesday

German unemployment (May), 8.55am: The number of unemployed is forecast to fall by 15,000, from a 25,000 drop in April. Market to watch: EUR/USD

Thursday

US GDP (Q1, first revision), initial jobless claims, 1.30pm: It is expected that growth for the first three months in the US will be revised to a contraction of 0.6%, from the first estimate of 0.1% growth. Market to watch: EUR/USDGBP/USDDow JonesS&P 500

US pending home sales (April), 3pm: The rate here is forecast to be 1% growth month-on-month, down from 3.4% for March. Market to watch: EUR/USDGBP/USDDow JonesS&P 500

Friday

Japanese jobless rate (April), 12.30am: The unemployment rate is not expected to shift from its 3.6% level. Market to watch: Nikkei, USD/JPY

Chicago PMI (May), 2.45pm, Univ. of Michigan confidence index (May, final reading), 2.55pm: The final data points of the week are mixed in nature, with the Chicago purchasing managers index easing back to 60 from 63, while the final reading on confidence for the month will rise to 82.8 from 81.8. Market to watch: EUR/USDGBP/USDDow JonesS&P 500

 

Company announcements

Tuesday

AVEVA

Wednesday

De La Rue

Thursday

KingfisherTate & LylePayPointSevern TrentCostcoAbercrombie & Fitch

 

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