Friday preview: UK local elections, US April jobs report

Investors' attention on Friday will be foremost on the results of the local elections, as they try and assess the most likely implications of the results for the ongoing cross-party talks on a customs union proposal and the British economy in general.

Just the day before, Bank of England Governor Mark Carney noted in his post-meeting press conference that either of Prime Minister May's withdrawal deal or the cross-party customs union deal under discussion would be a better result than embedded in the MPCs base case scenario.

That prompted Samuel Tombs, chief UK economist at Pantheon Macroeconomics to tell clients: "While a breakthrough in talks isn't imminent - Labour won't play ball at least until the Conservatives have suffered a heavy defeat at the European Parliament elections on May 23 — our base case remains that MPs will be given a free vote on a limited range of Brexit options and will coalesce around the customs union plan before the October deadline.

"Accordingly, we continue to think that the MPC will raise Bank Rate to 1.00% before the end of this year."

Financial markets' focus at the end of the week meanwhile will be squarely on the monthly US jobs report for April, which is expected to show hiring still running well above the pace needed to simply absorb new entrants into the workforce.

Consensus is anticipating a 181,000 increase in non-farm payrolls for the month of April, which economists at Barclays anticipate will push the unemployment rate down by a tenth of a percentage versus the month before to 3.7%, even as the pace of wage growth picks up from a year-on-year pace of 3.2% to 3.3%.

The jobs report will be published at 1330 BST.

Also scheduled for release on Friday is the key ISM services sector PMI, at 1500 BST.

It will be followed throughout the US trading session by speeches from at least four top US central bank officials, including Fed vicechairman Richard Clarida, at 1430 BST.

Across the Channel meanwhile, the spotlight will be on a final reading for euro area CPI covering the month of April which will likely print above the preliminary 1.6% year-on-year pace of advance estimated by Eurostat.

Back in the UK meanwhile, IHS Markit is due to publish its purchasing managers index for Britain's services sector in April.

On the corporate side of things, Numis's Tom Rayner is anticipating more or less flat first quarter revenues at HSBC, given the challenging market conditions seen across the sector.

Even more important however will be management's outlook for the lender's topline in 2019, he said.

The trend in margins will also be a key focus, including the lender's performance on cost control.

Rayner is also expecting about $750m worth of impairments, although he concedes that he tends to be above consensus on this front.

In a research note sent to clients, he also pointed out how seasonality might boost the lender's risk weighted assets, thereby putting pressure on HSBC's ET1 capital buffer, which management was aiming to keep at 14.0%.

Friday May 03

INTERIMS

Numis Corporation

INTERIM DIVIDEND PAYMENT DATE

Tracsis, Volution Group (WI)

QUARTERLY PAYMENT DATE

BMO UK High Income Trust , British Land Company, Marble Point Loan Financing Limited NPV

INTERNATIONAL ECONOMIC ANNOUNCEMENTS

ISM Non-Manufacturing (US) (15:00)

Non-Farm Payrolls (US) (13:30)

PMI Composite (EU) (09:00)

PMI Composite (GER) (08:55)

PMI Composite (US) (14:45)

PMI Services (EU) (09:00)

PMI Services (GER) (08:55)

PMI Services (US) (14:45)

Producer Price Index (EU) (10:00)

Unemployment Rate (US) (13:30)

SPECIAL DIVIDEND PAYMENT DATE

BMO UK High Income Trust B Shares, Quartix Holdings

AGMS

InterContinental Hotels Group, Intu Properties, Kingspan Group, Merlin Entertainments , Petrofac Ltd., Symphony Environmental Technologies

TRADING ANNOUNCEMENTS

Convatec Group , Intu Properties, Smurfit Kappa Group

UK ECONOMIC ANNOUNCEMENTS

PMI Services (09:30)

FINAL DIVIDEND PAYMENT DATE

AIB Group, Anglo American, Capital Drilling Ltd. (DI), Foresight VCT, Meggitt, Nichols, Quartix Holdings , Spirent Communications, XLMedia

Q1

HSBC Holdings