Bank’s super Thursday could cause fireworks - London Report

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ref="http://www.cityam.com/company/hsbc-holdings">HSBC was this morning the latest UK bank to report results, with Standard Chartered rounding off third quarter earnings season tomorrow.

There are concerns the emerging market focused Standard Chartered will have taken a hit over the past three months due to the slowing economy in China and fears surrounding emerging market growth.

The bank’s share price has plunged to its lowest in five years.

Not helping matters, Bloomberg reported last week that Standard Chartered is considering raising at least $4bn to fend off tougher capital regulations.

Vying for attention tomorrow will also be Associated British Foods with full year results that investors are hoping won’t be too badly hit by tumbling sugar profits.

Imperial Tobacco, which smugly signaled in August it expecting everything to be on track, is also scheduled for full year results tomorrow.

On the macro side, we’re expecting UK service PMIs on Wednesday as well as a Bank of England “Super Thursday” where we’ll get a glimpse of what to expect from Threadneedle Street throughout 2016.

The last monthly numbers from the dominant UK service sector suggested Britain's recovery is losing steam, mostly down to concerns over the world economy, curbed consumer spending and manufacturing weakness.

If we see a repeat of the last figures on Wednesday we could be headed for the lowest growth in a final quarter since 2012.

The Bank of England’s second “Super Thursday” information overload will treat us to the release of an interest rate decision, meeting minutes and the final inflation report of the year, however don’t hold your breath for a change in policy.

The pound could be set for fireworks though.

Ranko Berich, of Monex Europe, said: “Alongside the uncertain international outlook the UK economy is facing slowing growth, tight fiscal policy and no inflation in sight, making interest rate moves a non-starter.”

Reports to keep an eye out for this week: Tomorrow: Imperial Tobacco, and Associated British Foods. Wednesday: Marks and Spencer. Thursday: Astrazeneca; Dairy Crest, and Tate and Lyle. Friday: 3i Group.

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