THE GLOBAL economy will once again set the tone for the markets this week, with a crucial German ruling on the new bailout fund due on Wednesday and a potential move on QE3 by the US Federal Reserve on Thursday.
Greek leaders will today meet with their creditors to outline further austerity measures.
And UBS’s troubled past will come back to haunt it today when Kweku Adoboli, a former trader in UBS’s global synthetic equities division, goes on trial in a case involving losses of £1.5bn through unauthorised trades.
Investors will be keen to see if operating profits at Associated British Foods’ sugar division are being sustained, with a trading statement expected this morning.
Primark, the group’s budget fashion retailer is also expected to report a boost in sales as it continued to strike a chord with cash-strapped shoppers.
Betfair will update the market tomorrow, in its maiden report since chief executive Breon Corcoran joined in August.
Barratt Developments is set to reveal full year sales of around £2.3bn on Wednesday and is also expected to reinstate its dividend for the first time since the financial crisis. The housebuilder, which has seen shares almost double this year, is expected to benefit further from government-backed efforts to boost activity in the new build sector.
But all eyes will be on the German court ruling on whether the European Union’s new rescue fund complies with the country’s constitution. If it vetoes it, the ECB’s plans to act as an unlimited lender of last resort to struggling European nations could be left in tatters.
“Mario Draghi’s statement [last week] provided positive impetus to a market that had been anticipating positive news but with traders back at their desks it is difficult to see FTSE breaking out without definitive steps to provide visibility,” analysts at Northland Capital said. “We would not be surprised to see it test the lows of the summer over the next few weeks with softer economic data coming out of China putting pressure on commodity stocks.”
Thursday sees a raft of retail news, with Next reporting half year results alongside Dunelm, Home Retail, Darty as well as Kingfisher. Following on Friday is pub chain JD Wetherspoon.