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Week ahead: Downside risks to growth lessened, deflation risks still present

Week Ahead

Week ahead: Downside risks to growth lessened, deflation risks still present

Sun, 30 March 2014
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Week ahead: Downside risks to growth lessened, deflation risks still present

Data out over the coming week is expected to confirm that growth prospects in the Eurozone and US remain firm even while underlining the risk of deflation in the single currency area.

The latest non-farm payrolls figures will show that the US generated 190,000 jobs in March, alongside another tick lower in the unemployment rate. That seems to be good enough for now, but the pace needs to be maintained. Hence, the latest manufacturing and services sector purchasing managers’ indices will be closely watched by investors, particularly the former given the recent slowdown in global manufacturing.

Fed Chair Janet Yellen will speak on Monday and the foreign trade numbers scheduled for release on Thursday may also be worth watching.

The European Central Bank’s (ECB’s) governing council will meet this week. They are expected to hold their fire despite the real possibility that markets might not be fully pricing in deflation risks, Barclays Research writes. Amongst other reasons, that is because of the possibility that China will export disinflation as it slows down (lower than expected price pressures are also considered to be a risk in Japan) and the strength in the euro.

One key element in the ECB’s rationale is likely the fact that inflation expectations, as measured by so-called ‘inflation break-evens’ are currently in line with its definition of price stability. Other considerations may also include further building up future financial stability risks by acting now and the desire to not make it too easy for governments to shirk the need for further structural reforms, analysts at Sharecast point out.

Even so, and they are not alone in that view, Barclays Research is of the view that it is not at all easy to rationalise the central bank’s stated hesitance to carrying out further stimulus. Thus, to the above factors the broker adds the risk of disinflation as a result of the economic reforms which are in the pipeline in France and Italy, the still negative output gap in the single currency area and weaker growth in emerging markets and currencies in key trade partners.

Naturally, the outlook for the Eurozone is a critical component when assessing that for Britain, authorities’ attempts here to rebalance the economy and the future path of sterling.

As far as the UK is concerned, Tuesday’s manufacturing PMI will be the main release to watch out for, together with the latest house price surveys. Governor Mark Carney will deliver a speech on Monday evening.

Acting as a backdrop, over the last week Chinese authorities already moved to buttress growth and seem ready to continue to act on this front. Critically, perhaps, some construction firms were allowed to refinance their equity and the most recent indications are of increasing energy use. Both of these factors also bode well for commodity markets, but risks to the country’s growth outlook are still thought to be present. In parallel, it is believed that the country’s currency, the Yuan, could yet come under some added selling pressure.

Monday March 31

INTERIMS
Inland Homes, YouGov, Bowleven

INTERIM DIVIDEND PAYMENT DATE
Mountview Estate, The Renewables Infrastructure Group Limited

QUARTERLY PAYMENT DATE
MedicX Fund Ltd., Premier Energy & Water Trust

INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Chicago PMI (US) (14:45)
International Reserves (EU) (11:00)
Preliminary CPI (EZ) (09:00)
Retail Sales (GER) (07:00)
Speech Fed Chair Janet Yellen
Industrial production (JP) (08:50)
Q4
Caledonia Mining Corporation

FINALS
Burford Capital , Caledonia Mining Corporation, Christie Group, Globaltrans Investment GDR (Reg S), Hibernia Reit , Ithaca Energy Inc. (DI), Martinco , Minera IRL, Ocean Wilsons Holdings Ltd., Polymetal International, Quindell , Safestyle UK , Skyepharma, Starcom, TEG Group (The), Toumaz Limited

ANNUAL REPORT
New Europe Property Investments, Talvivaara Mining Company (CDI)

SPECIAL DIVIDEND PAYMENT DATE
Avanti Capital, Premier Energy & Water Trust, Rights & Issues Inv Trust Capital Shares, Rights & Issues Inv Trust Income Shares

AGMS
Arria NLG, IRF European Finance Investments Ltd (DI), Lecico Egypt SAE GDR (Reg S), Manroy, Pentagon Protection, Sula Iron & Gold, Talent Group, Turkiye Petrol Rafinerileri AS GDR (Reg S), UK Oil & Gas Investments 'A'

TRADING ANNOUNCEMENTS
KCOM Group

UK ECONOMIC ANNOUNCEMENTS
Consumer Credit (09:30)
M4 Money Supply (09:30)
M4 Sterling Lending (09:30)
Mortgage Approvals (09:30)
Speech BoE Deputy Governor Andrew Bailey (14:10)
Speech Katharine Braddick, BoE Director of Prudential Policy (12:10)
Speech Governor Mark Carney (18:15)

FINAL DIVIDEND PAYMENT DATE
Polar Capital Global Financials Trust, Rights & Issues Inv Trust Capital Shares, Rights & Issues Inv Trust Income Shares, Temple Bar Inv Trust

Tuesday April 01

INTERIMS
Applied Graphene Materials

QUARTERLY EX-DIVIDEND DATE
Torchmark Corp.

INTERNATIONAL ECONOMIC ANNOUNCEMENTS
NBS Manufacturing PMI (China) (08:00)
HSBC Final Manufacturing PMI (China) (09:45)
RBA cash rate (Australia) (11:30)
Auto Sales (US) (15:00)
Construction Spending (US) (15:00)
ISM Manufacturing (US) (15:00)
ISM Prices Paid (US) (15:00)
PMI Manufacturing (EU) (09:00)
PMI Manufacturing (GER) (08:55)
Unemployment Rate (EU) (10:00)
Unemployment Rate (EZ) (09:00)
Unemployment Rate (GER) (08:55)
Bank of Japan Tankan survey (08:50)

Q4
Minera IRL Ltd.

FINALS
Corac Group, London Capital Group Holdings, Vernalis

AGMS
AL Noor Hospitals Group

TRADING ANNOUNCEMENTS
ICAP, Aberdeen Asset Management

UK ECONOMIC ANNOUNCEMENTS
PMI Manufacturing (09:30)

Wednesday April 02

INTERIM DIVIDEND PAYMENT DATE
Darty

INTERIM EX-DIVIDEND DATE
Abbey, Finsbury Food Group, Henderson EuroTrust, Plexus Holdings, Produce Investments, Smith (DS), Wolseley

QUARTERLY PAYMENT DATE
Blackrock North American Income Trust

QUARTERLY EX-DIVIDEND DATE
Investors Capital Trust 'A' Shares, Investors Capital Trust 'B' Shares, JP Morgan Chase & Co, Mercantile Investment Trust (The), Schroder Income Growth Fund

INTERNATIONAL ECONOMIC ANNOUNCEMENTS
ADP Employment Report (US) (13:15)
Crude Oil Inventories (US) (15:30)
Factory Orders (US) (15:00)
GDP (2nd release) (EU) (10:00)
Goods Orders (US) (15:00)
MBA Mortgage Applications (US) (12:00)
Producer Price Index (EU) (10:00)

INTERIMS
Asos

FINALS
Amiad Water Systems Ltd, Cupid, Inditherm, MHP SA GDR (Reg S), office2office, Cupid

IMSS
Domino's Pizza Group, Dunelm

SPECIAL EX-DIVIDEND PAYMENT DATE
888 Holdings, Next

AGMS
Domino's Pizza Group, JSJS Designs, Jupiter Second Split Trust Geared Gwth Shares, RCM Technology Trust, Teliasonera AB, Zenith Bank GDR (REG S)

TRADING ANNOUNCEMENTS
Plus500 Ltd (DI)

UK ECONOMIC ANNOUNCEMENTS
PMI Construction (09:30)
Nationwide House Price Index (07:00)
FINAL DIVIDEND PAYMENT DATE
Greencore Group

FINAL EX-DIVIDEND DATE
32Red, 888 Holdings, Amino Technologies, APR Energy, Aviva, Belvoir Lettings, Dragon Oil, Glanbia, Heavitree Brewery, Heavitree Brewery 'A' Shares, HGCapital Trust, Interserve, Jardine Lloyd Thompson Group, John Laing Infrastructure Fund Ltd, Miton Group, Motivcom, New Europe Property Investments, Nichols, Pearson, Phoenix Group Holdings (DI), Resolution Ltd., SpaceandPeople, Stadium Group, Tullow Oil

Thursday April 03

INTERIM DIVIDEND PAYMENT DATE
Hansard Global, Mid Wynd International Inv Trust, Pennon Group

INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Balance of Trade (US) (13:30)
Bloomberg Consumer Confidence (US) (14:45)
Continuing Claims (US) (13:30)
ECB Interest Rate (EU) (12:45)
Initial Jobless Claims (US) (13:30)
ISM Non-Manufacturing (US) (15:00)
ISM Services (US) (15:00)
PMI Composite (EU) (09:00)
PMI Composite (GER) (08:55)
PMI Services (EU) (09:00)
PMI Services (GER) (08:55)
Retail Sales (EU) (10:00)

GMS
Thor Mining

FINALS
African Minerals Ltd., OSJC Center for Cargo Container Traffic Transcontainer GDR (Reg S), AMEC

ANNUAL REPORT
Hill & Smith Holdings

EGMS
Investors In Global Real Estate Ltd

AGMS
Amec, Scottish American Inv Company

TRADING ANNOUNCEMENTS
Electrocomponents, Hyder Consulting, Tate&Lyle

UK ECONOMIC ANNOUNCEMENTS
Official Reserves (09:30)
PMI Composite (09:30)
PMI Services (09:30)

Friday April 04

INTERIM DIVIDEND PAYMENT DATE
Foresight Solar VCT, Gleeson (M J) Group, Go-Ahead Group

INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Factory Orders (GER) (11:00)
Non-Farm Payrolls (US) (13:30)
PMI Construction (GER) (08:30)
PMI Retail (EU) (09:10)
PMI Retail (GER) (09:10)
Unemployment Rate (US) (13:30)

ANNUAL REPORT
Alpha Pyrenees Trust Ltd., Menzies(John)

EGMS
JSC Uralkali GDR (Reg S)

AGMS
AFC Energy, P.T. Telekomunikasi Indonesia (Persero) ADS (Repr 200SerB Rp50)(Regs), Rare Earth Minerals Ltd

UK ECONOMIC ANNOUNCEMENTS
New Car Registrations (09:30)

FINAL DIVIDEND PAYMENT DATE
Blackrock Throgmorton Trust, Domino's Pizza Group, MTI Wireless Edge Ltd., Octopus Titan VCT 1, Octopus Titan VCT 2, Octopus Titan VCT 3, Octopus Titan VCT 4, St. Modwen Properties, Treatt

FTSE 100 Top Risers

Name Last Chg.% Time
Antofagasta 761.00 3.75 17:01
Kingfisher 298.70 2.54 17:11
BT Group 404.40 2.17 17:02
SSE 1,614.00 1.84 17:13
Hargreaves Lansdown 984.00 1.65 17:03

FTSE 100 Top Fallers

Name Last Chg.% Time
TUI Travel 417.50 -2.11 17:00
Smith & Nephew 1,107.00 -1.42 17:12
Compass Group 1,060.00 -1.30 17:15
Coca-Cola HBC AG (CDI) 1,428.00 -1.24 16:36
Carnival 2,644.00 -1.05 17:03