Markets will hope recovery is not blown off course

Observers of the US economy will have jobs data to chew over on Friday. Picture: Getty

Investors are hoping that a raft of American data will confirm that the figure was just a one-off driven by the weather.

Meanwhile, purchasing managers’ surveys are expected to show UK business remains in fine fettle, but the big event of the week will be the European Central Bank’s policy meeting.

Philip Shaw, economist at Investec, said: “Thursday’s [ECB] meeting looks set to be critical following a large number of strongly worded hints from senior members that a package of easing measures is due at the June meeting.”

WEEK AHEAD

Today

• Manufacturing PMI – The first of the monthly purchasing managers’ indices is expected to show that Britain’s industrial sector continued to grow in May, although perhaps at a slightly slower rate than in April.

• Mortgage approvals – Bank of England figures will give a further clue as to how far recent tightening of lending criteria has taken the steam out of the housing market.

Tomorrow

• Construction PMI – Building is likely to have carried on expanding at a solid level.

• Wolseley – The Plumb Center and Pipe Center owner will reveal the extent that the harsh winter in the United States has dented sales when it publishes a third-quarter trading statement.

• Pennon – Broker Charles Stanley predicts that water and waste conglomerate Pennon will post full-year pre-tax profits of £201 million, up a fraction and enough to keep dividends moving north at 4 percentage points more than inflation.

Wednesday

• Services PMI – All the signs point to the dominant services sector continuing to power the UK economy to a solid growth reading in the second quarter. May’s reading should be close to the 2014 high of 58.7 set in April.

• Tesco – Analysts at Barclays expect like-for-like sales at Britain’s biggest supermarket chain will be down 4.1 per cent in the first quarter of the financial year, representing its weakest performance “for many years” as it struggles to see off increased competition from discounters Aldi and Lidl.

Thursday

• ECB – Anticipation has been building ahead of the European Central Bank’s June meeting as policymakers dropped a series of heavy hints that they are planning something major. Economists say the ECB will likely try a combination of negative interest rates and cheap money to revive the flagging eurozone economy.

• Bank of England – With the UK economy in far better shape than the rest of Europe, the monetary policy committee will almost certainly sit on its hands. But behind the closed doors, a debate will be raging over how long rates can stay at their record low.

• AO World – The online appliances retailer reports its maiden annual results as a listed company after a period in which its shares have fallen since it floated in February.

Friday

• US jobs – After last week’s worse than expected downwards revision of first quarter growth, the non-farms payrolls and unemployment figures take on extra significance for markets and monetary policy makers.