What to Expect From the Week Ahead

Next week, we will be hoping for some certainty on the Greek debt fiasco and dissecting the records from the Bank of England’s and the Fed's latest rate-setting meetings

Morningstar.co.uk Editors 13 May, 2011 | 6:45PM
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The ‘progress’ of Greece’s debt crisis will likely be the prime focus of attention at the start of next week. After Greek officials on Tuesday denied rumours that Athens will hastily receive a EUR 60 billion bailout, all eyes will be on the eurozone finance ministers’ meeting this coming Monday. Sovereign debt issues are also likely to dominate the agenda of the subsequent EU summit on Tuesday.

Meanwhile, the President of the European Council Herman van Rompuy will be on a four day state visit in China. State intervention on EU sovereign debt markets is a probable topic of discussion during this visit, as China has played a key role in buying up Spanish and Portuguese government bonds in the past months.

Expectations that any of these meetings will provide a panacea for the eurozone debt crisis are low. “Debt reorganisation [in Greece] will be far from easy,” Morningstar Markets Editor Jeremy Glaser recently wrote, while reminding us that “the political will to throw money at this problem is likely waning” and “voters are sick of bailouts.” Acknowledging the significant challenges in resolving and containing the Greek debt tragedy, Glaser did not rule out the possibility that Greece leaves the eurozone.

Equity and debt markets have thus far showed a relative resilience amid the European sovereign debt chaos. However, the added uncertainty and amounting fears that the Greek problem will drag on will surely continue to be a source of market volatility.

Elsewhere, there will be a number of economic data announcements of note next week. Japan is to release machine orders and industrial production for March on Monday and Thursday, respectively, in addition to its Tertiary Industry Index for March on Wednesday. These figures will add to investors’ understanding of how the country’s economy has responded to the March 11 earthquake. At the end of the week, the central bank of Japan will issue its May base interest rate decision.

Closer to home, Tuesday’s May UK CPI data will provide some additional context for ongoing monetary policy and inflation discussions, as will the latest Bank of England’s MPC meeting minutes, due on Wednesday. We saw the Bank lower its growth forecast this Wednesday and project above-target inflation until end-2012. Investors will be looking to see how these changing views have been reflected in monetary policy discussions.

Across the pond, key economic announcements are expected on Tuesday with the US Industrial Production for April and on Wednesday with the US’s own FOMC meeting minutes. In addition, there will be US housing market data of note released on Tuesday and Thursday.

On the corporate announcements front, reporting season is winding down, but few major events will keep investors busy. Among these, Aviva (AV.) and Vodafone (VOD) are updating the market on Tuesday, Cairn Energy (CNE) and Experian (EXPN) on Wednesday and National Grid (NG.) and SABMiller (SAB) on Thursday.

Monday
UK Corporate Announcements
Cranswick (CWK) preliminaries, ITE Group (ITE) interims, Lamprell (LAM) IMS
International Economic Announcements
Japan: Machine Orders for March, Consumer Confidence for April, March Survey of Commerce
Eurozone: CPI for April, Trade Balance for March
US: Empire State Manufacturing Survey for May, NAHB Housing Index for May

Tuesday
UK Corporate Announcements
Aviva (AV.) IMS, Babcock International Group (BAB) preliminaries, Biofutures International (BIP) preliminaries, Capital Shopping Centres Group (CSCG) IMS, Derwent London (DLN) IMS, Enterprise Inns (ETI) interims, Keller Group (KLR) AGM, Vodafone Group (VOD) preliminaries
UK Economic Announcements
CPI for April, DCLG House prices for March
International Economic Announcements
Eurozone: German ZEW Survey for May
US: Housing Starts and Building Permits for April, Industrial Production for April

Wednesday
UK Corporate Announcements
Cairn Energy (CNE) IMS, Compass Group (CPG) interims, CPP Group (CPP) IMS, Experian (EXPN) preliminaries, ICAP (IAP) preliminaries, Land Securities Group (LAND) preliminaries, Mothercare (MTC) preliminaries,
Ex-dividend Date
FTSE 100: Admiral Group (ADM), HSBC Holdings (HSBA), J Sainsbury (SBRY)
FTSE 250: Bellway (BWY), Carillion (CLLN), Cookson Group (CKSN), Derwent London (DLN), Home Retail Group (HOME), Inchcape (INCH), The Morgan Crucible Company (MGCR), The Restaurant Group (RTN), WH Smith (SMWH)
UK Economic Announcements
Minutes of the May Bank of England MPC Meeting, Jobless Claims Change for April, Average Weekly Earnings and ILO Unemployment for March
International Economic Announcements
Japan: Tertiary Industry Index for March
Eurozone: Construction Output for March
US: Minutes of April FOMC Meeting

Thursday
UK Corporate Announcements
Booker Group (BOK) preliminaries, Dairy Crest Group (DCG) preliminaries, Euromoney Institutional Investor (ERM) preliminaries, Grainger (GRI) interims, Invensys (ISYS) interims, Investec (INVP) interims, Marston's (MARS) interims, National Grid (NG.) preliminaries, Premier Oil (PMO) IMS, SABMiller (SAB) preliminaries, TalkTalk Telecom Group (TALK) preliminaries
UK Economic Announcements
Retail Sales for April, CBI Trends in Total Orders and Selling Prices for May
International Economic Announcements
Japan: 1Q GDP, Industrial Production for March
US: Weekly Jobless Claims, Existing Home Sales for April, Leading Indicators for April, Philadelphia Fed Survey for May

Friday
UK Corporate Announcements
Mitchells & Butlers (MAB) interims, Scottish & Southern Energy (SSE) preliminaries
International Economic Announcements
Japan: Bank of Japan Target Rate, Convenience Store Sales for April, All Industry Index for March
Eurozone: Current Account for March and German Producer Prices for April

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Morningstar.co.uk Editors  analyse and report on shares, funds, market developments and good investing practice for individual investors and their advisers in the UK.