What to expect from the week ahead

Thursday’s Bank of England Monetary Policy Committee meeting is likely to be something of a non-event this time round, with the committee firmly expected to keep interest rates at the their current record low of 0.5% and to confirm that its quantitative easing programme is continuing.

As such, with the UK benchmark index having seemingly paused for breath after a 28% surge since early March, investors’ focal point of the week will be to look out for any further signs that the British economy—and, indeed, the global economy—is making steps to get out of the current recession.

Starting with the United States’ economic releases, Monday’s ISM manufacturing survey is expected to have crept up to 42.0 in May from the previous month’s 40.1 reading; Tuesday’s pending home sales are seen up 0.3% in April after a 3.2% increase in March; Wednesday’s ISM non-manufacturing composite survey is forecast to have risen to 45.0 in May from 43.7 the month before; and Thursday’s non-farm productivity is seen 1.2% higher in the first quarter of 2009 against a 0.8% improvement in the final quarter of 2008. So far, so good. On Friday, however, the US unemployment rate is expected to show an increase to 9.2% in May from the previous month’s 26-year-high of 8.9%.

Aside from the BoE rate-setting meeting, other UK economic data due this week include the PMI manufacturing survey (Monday), the PMI service sector survey (Wednesday) and the Nationwide consumer confidence index (also Wednesday).

On the corporate front, among those set to update the market on their trading environments are B&Q owner Kingfisher, which will report first quarter results on Tuesday, supermarkets group Wm Morrison, which will unveil full-year numbers on Thursday, and mobile phone retailer Carphone Warehouse, which is to post full-year results on Friday. Together, the three should provide a fairly comprehensive overview into the state of the retail sector in the UK.

British Airways and easyJet will each report their May traffic figures on Wednesday and Thursday, respectively, providing investors with some insight into how the airline industry is coping with the recession.

Housebuilder Bellway’s interim management statement on Thursday will provide a glimpse into the housing sector, while Wednesday’s Northumbrian Water final results will update the market on how the utility firm is weathering the downturn.

Among those stocks that will trade ex-dividend on Wednesday are heavyweight Vodafone, as well as WPP, Daily Mail & General Trust, National Grid and Marston’s.

Turning to shareholder meetings, Lloyds Banking Group annual general meeting on Friday will be followed by a vote of shareholders on the group’s proposed placing and open offer.

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