The Week Ahead - UK interest rate decision, non-farm payrolls to dominate

The Bank of England’s policy meeting is the big event in the markets this week as speculation of a rate cut is driving moves in sterling and equities.

After leaving rates on hold last month, a sharp deterioration in economic sentiment in the intervening period would appear to leave the Monetary Policy Committee with little option but to announce fairly aggressive stimulus measures.

Ahead of the meeting, the triple bill of PMI reports for the manufacturing, services and construction sectors are expected to confirm that the economic outlook has deteriorated in the wake of the Brexit vote. A flash report issued on July 22nd indicated the economy contracting at the steepest pace since early-2009.

On Friday, attention shifts across the pond to the monthly US non-farm payrolls report, a key economic indicator. Last month’s 287,000 was the biggest rise since January and restored confidence in the world’s largest economy after a woeful figure in preceding month. Another round of strong job creation would put more pressure on the Federal Reserve to raise rates before the year is out.

Earnings season continues, with several notable FTSE constituents to report, including Rio Tinto and HSBC. After last week’s monster earnings it’s a little quieter on Wall Street but there are still plenty of releases to watch, particularly a number of computer games makers who are riding the coattails of Nintendo’s Pokemon Go craze.

Economic Calendar

(All times are BST)

Monday, August 1st

Bank Holiday – Switzerland & Canada

02:00 – China manufacturing PMI & non-manufacturing PMI

02:45 – China Caixan manufacturing PMI

09:30 – UK manufacturing PMI

15:00 – US ISM manufacturing PMI

Tuesday, August 2nd

05:30 – Australia interest rate statement

09:30 – UK construction PMI

Wednesday, August 3rd

09:30 – UK services PMI

13:15 – ADP non-farm employment change

15:00 – ISM non-manufacturing PMI

15:30 – US crude oil inventories

Thursday, August 4th

12:00 – UK interest rate decision & Bank of England monetary policy statement

12:30 – Bank of England governor Mark Carney press conference

Friday, August 5th

13:30 – US non-farm payrolls and earnings

Earnings Calendar

 

Monday, August 1st

Trinity Mirror (TNI) – S1/2016

Tuesday, August 2nd

Electronic Arts (EA) – Q1/2017, EPS estimate -0.02

Pfizer (PFE) – Q2/2016, EPS estimate 0.622

Pitney Bowes (PBI) – Q2/2016, EPS estimate 0.390

Procter & Gamble (PG) – Q4/2016, EPS estimate 0.744

Greggs (GRG) – S1/2016

InterContinental Hotels Group (IHG) – S1/2016, EPS estimate 0.846

Wednesday, August 3rd

Liberty Media Corp – Q2/2016, EPS estimate 0.210

Tesla Motors (TLSA) – Q2/2016, EPS estimate -0.560

HSBC (HSBA) – S1/2016, EPS estimate 0.330

Rio Tinto (RIO) – S1/2016, EPS estimate 1.00

Standard Chartered (STAN) – S1/2016, EPS estimate 0.290

Thursday, August 4th

Activision Blizzard (ATVI) – Q2/2016, EPS estimate 0.421

Kraft Heinz (KHC) – Q2/2016, EPS estimate 0.718

LinkedIn Corp (LNKD) – Q2/2016, EPS estimate 0.780

Aviva (AV) _ S1/2016, EPS estimate 0.236

Ladbrokes (LAD) – S1/2016, EPS estimate 0.027)

RSA Insurance (RSA) – S1/2016, EPS estimate 0.126

Friday, August 5th

Royal Bank of Scotland (RBS) – Q2/2016, EPS estimate 0.051

William Hill (WMH) – S1/2016, EPS estimate 0.111

 

(Sources: Bloomberg, CNBC)