Week ahead

Fed tipped to hold US rates | Iomart posts FY figures

Jerome Powell
Fed chair Jerome Powell will head meeting on interest rates

Central banks take centre stage as the US Federal Reserve, the European Central Bank and the Bank of Japan announce their latest interest rate decisions ahead of the Bank of England’s next move.

The Fed is up first up on Wednesday and the market is expecting it to sit on its hands after taking the Fed Funds rate to 5.25% from 0.25% in just over a year.

However, there is a strong chance of a hike in July and a similar chance of one in September to a peak of 5.75% before the first cut in either November or December.

The European Central Bank follows on Thursday. It has been late to the interest rate party but has jacked up rates to 3.75% and president Christine Lagarde has told markets to expect more rate rises.

Bank of Japan’s new governor Kazuo Ueda is a rare creature among central bankers because he has not raised rates.  No change is expected on Friday either, even if inflation is now 3.5% and ahead of the 2% target, and its ongoing monetary stimulus could be one explanation why the Nikkei 225 stock index keeps moving higher.

Alister Jack, the Scotland Secretary, will appear before the Scottish Affairs Committee in the Commons on Monday to discuss the UK Government’s role in promoting Scotland internationally. He will be joined by Lord Offord of Garvey from the Department for Business and Trade and David Rutley MP from the Foreign, Commonwealth and Development Office.  

The session follows recent controversy over the UK Government calling on Scottish government ministers to stop promoting its independence agenda at meetings involving foreign governments.

Among corporate announcements, Glasgow cloud computing firm Iomart reports full year figures on Tuesday on the back of it returning to the M&A market, though last week’s acquisition of Extrinsica Global Holdings came post-year end. CEO Reece Donovan can be expected to comment on the firm’s ext phase of growth as a leading secure hybrid cloud business.

Its shares are up by a significant 32% over the last three months. However, there are doubts that the current momentum will be maintained because of declining earnings and a commitment to spending most of its profits in paying dividends. This is leaving very little to reinvest in the business.

DIARY

Tuesday 13 June

  • Full-year results from Iomart, Ashtead, Oxford Instruments
  • Trading statement from Bellway
  • US inflation figures

Wednesday 14 June

  • Full-year results from Severfield and OnTheMarket
  • First-half results from Safestore
  • UK monthly GDP figures
  • UK manufacturing, construction and industrial output
  • US Federal Reserve meets to announce interest rate decision
  • US producer price (factory gate) inflation
  • US oil inventories

Thursday 15 June

  • Full-year results from Halfords, GB Group, Fuller Smith & Turner and Marks Electrical
  • Trading statement from Bunzl
  • Chinese fixed asset investment, retail sales and industrial production data
  • European Central Bank meets to announce interest rate decision
  • US retail sales
  • US industrial production and capacity utilisation rates
  • US weekly unemployment claims

Friday 16 June

  • Full-year results from Peel Hunt
  • Trading statement from Tesco
  • Japan Central Bank meets to announce interest rate decision


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