CFDer er komplekse finansielle instrumenter og investeringer i disse innebærer høy risiko for å tape penger raskt, grunnet gearing. 72% av ikke-profesjonelle kunder taper penger når de handler i slike produkter med denne tilbyderen. Du bør vurdere om du forstår hvordan CFDer fungerer og om du har råd til å ta den høye risikoen for å tape pengene dine.
Weekly outlook

The Week Ahead: UK Budget; US inflation; ECB rate decision; Deliveroo results

The Week Ahead: CMC Markets' Michael Hewson analyses key upcoming economic and company events.

On Wednesday chancellor Jeremy Hunt will unveil his Budget, outlining the UK government’s tax and spending plans. A day before that, the US consumer price index (CPI) reading for February will be announced, and on Thursday the European Central Bank will decide whether to raise interest rates across the eurozone. In a quiet week for earnings reports, Deliveroo and FedEx are among the companies set to dispatch their latest results.  

Our top three economic events to look out for this week are:

1. Wednesday – UK Budget

The last few months have been challenging for the UK economy. In the aftermath of the emergency autumn Budget, the narrative has been pessimistic. Back then, the Office for Budget Responsibility, the IMF, and the Bank of England all doubled down on their depressing outlooks for the UK economy, arguing that the country was already in recession and likely to remain there for at least two years.

Since those dark October days, inflation has started to come down, albeit slowly, but industrial unrest has grown. Consumer spending has been weak, with retail sales falling sharply at the end of last year. On the plus side, tax revenues proved resilient, helped by higher-than-expected inflows from self-assessment of £21.9bn, as well as by strong inflows from capital gains tax, which contributed £13.2bn in January. This is good news for Jeremy Hunt, the chancellor of the exchequer, as it means that the UK government has borrowed £30.6bn less than the OBR forecast. It also potentially gives him more wriggle room in this week’s Budget to rethink some of the recent tax hikes, especially the widely criticised increase in corporation tax. 

At a time when the UK economy needs all the help it can get, it beggars belief that the government thought raising taxes on already stretched businesses could be a good idea. Several companies postponed or cancelled investment programmes in anticipation of higher tax and regulatory burdens, while other companies are looking at moving away from the UK completely. It’s a fallacy that higher tax rates mean higher tax revenue. Put another way, 19% of something is better than 25% of nothing. The latter is the outcome that HMRC and the Treasury might be facing. 

There has also been speculation that the chancellor may extend the energy support scheme for businesses and freeze the energy price cap for households at its current level of £2,500 as energy prices have declined in recent months. A further freeze on fuel duty also seems likely. The super deduction (a scheme that allows companies to cut their tax bill), which expires in April, could be replaced with measures that allow offsetting against profits. 

In short, this week’s Budget is the ideal opportunity for the government to stop running scared, push back against the Treasury and calls for self-defeating tax rises, and take measures to stimulate investment and innovation. 

2. Tuesday – US CPI (February)

With the US Federal Reserve in a blackout period ahead of its next rate-setting meeting from March 21-22, there has been discussion over whether the Fed was right to ease the pace of interest rate rises to 0.25 percentage points in February, following its half-point rate hike in December. 

Since the February rate rise, US economic data has shifted. Retail sales in January surged 3% and US payrolls growth also soared. The inflation landscape has also shifted since Fed chair Jay Powell spoke of “disinflation” a month ago. Although headline inflation eased to 6.4% in January, down from 6.5%, markets had expected a larger fall. Core prices also proved sticker at 5.6%. Since those numbers were released, the producer price index (PPI) for December was revised upwards. This meant that core PPI, instead of coming in at 4.9% in January, stood at 5.4%. 

The upcoming figures for February are expected to show a further slowdown, with CPI easing to 6% and core price growth slowing to 5.4%. With the Fed poised to raise rates by a further 0.25 percentage points on 22 March, the latest CPI and PPI data could help determine whether the Fed raises rates twice or three times in the next few months. 

3. Thursday – ECB interest rate decision

The European Central Bank is set to raise interest rates by a further half a percentage point this week. The bigger question is how many more hikes may be coming. The hawks at the ECB have become more vocal, led by Bundesbank head Joachim Nagel. Although the German economy may be in a recession, Nagel is calling for more aggressive action on inflation. The recent ECB minutes showed that several governing council members wanted to go harder than a half-point move at the last meeting, calling for 0.75 percentage points. They relented because of a pledge to raise rates by another 50 basis points this month.

Central bankers are weighing up the risks of overtightening versus doing too little and allowing inflation to become entrenched. Calls for tighter monetary policy have come from ECB members such as Austria’s Robert Holzmann, who has called for rate hikes of 50 bps in March, May, June, and July. Markets have already started to price in an ECB terminal rate of more than 4%. Further rises in long-term yields in indebted countries like Italy could cause problems. With core CPI at a fresh record high of 5.6% and headline inflation on the rise in Spain, France and Germany, the ECB is playing catchup but also needs to remain mindful of financial stability.   

Other key events

Here's our calendar of this week’s other notable economic and company events:

Monday 13 March

No major scheduled events

Tuesday 14 March

UK unemployment, average earnings (January)

The UK labour market has been one of the bright spots of the UK economy, even though earnings are lagging behind inflation. The most recent wage numbers showed that pay excluding bonuses rose 6.7% year-on-year in the three months to December, up from 6.5% in the three months to November. What was also notable was that payrolled employees rose by 102,000 in January, highlighting the tightness of the UK labour market as headline inflation remains in double-digit territory. 

Private sector pay continues to lead with average increase of 7.3%, compared to 4.2% in the public sector. Unemployment remained steady at 3.7% in December, but given payroll growth in January, unemployment may have fallen to 3.6% in January. 

Resilience in average earnings will make it much harder for the Bank of England to procrastinate over rate rises. The Bank’s governor Andrew Bailey may want markets to think that the MPC is almost done when it comes to rate hikes, but with headline CPI still above 10%, and core prices and earnings up more than 6%, he may be able to kid some of the people some of the time, but he is unlikely to be able to push back against at least another 50 basis points of hikes between now and the summer.

Wednesday 15 March

US retail sales (February)

Personal spending in the US declined 0.2% month-on-month in November and 0.1% month-on-month in December, before rebounding with a 1.8% monthly increase in January, driven by a buoyant labour market. It was the biggest increase since March 2021, as US consumer spending came roaring back.

The big question is whether this recovery continued into February. If it did, it will have ramifications for the Fed’s interest rate policy, the forward guidance it issues as its upcoming meeting this month, and the trajectory of its dot plot for future rate hikes.

China retail sales (January-February)

Retail sales in China collapsed at the end of last year, falling 5.9% year-on-year in November, followed by a further 1.8% decline in December. The figures for the January-to-February period, which cover Chinese New Year, have the potential to provide a significant upside surprise after lockdown restrictions eased in China’s major cities from December. 

China’s trade balance pointed to improving domestic demand, while lunar new year celebrations may have spurred so-called revenge spending, as consumers went on a post-lockdown spending spree. Retail sales are expected to have grown 3.5% over the two-month period, while industrial production is expected to have increased 3.2%, up from a 1.3% rise in December. 

Balfour Beatty full-year results

After a profit forecast upgrade in December, shares of Balfour Beatty have moved up to their highest levels since 2008. It’s been a long road back for the construction group, which was on the brink back in 2013 and also got caught up in the Carillion fallout five years ago when it had to swallow millions of pounds in writedowns. 

Under the stewardship of CEO Leo Quinn, the company refocused its efforts on higher-margin work in all of its markets, primarily in the US and UK, while disposing of underperforming or non-performing assets. This focus on higher margins has realised £65m in profits after the disposal of five assets. Its order book is expected to be around 5% ahead of last year, as is full-year revenue. 

In January, Balfour Beatty announced another contract win of £1.2bn for the Lower Thames Crossing which involves the design and delivery of 10 miles of new roads connecting the M25 at junction 19 and the A13 to a river crossing at Tilbury in Essex. The company also set out a plan in January to buy back up to a further £50m of shares, with that plan scheme set to be completed by May. 

Adobe Q1 results

Adobe shares plunged roughly 60% from their November 2021 high to last September’s low of around $275 as tech valuations fell. A particularly sharp decline came after the company downgraded its Q4 revenue numbers last year. In December Q4 revenue came in as expected at $4.53bn, while profit beat expectations, coming in at $3.60 a share. 

On guidance, Adobe said they expected revenue of $4.6bn to $4.64bn for Q1, with the company keeping its full-year estimate unchanged. Adobe was on the receiving end of some unwelcome news last month after its $20bn deal to acquire Figma, a mobile web interface design company, was reported to be the subject of an antitrust investigation by the US Department of Justice, which may seek to block the deal. Profit in Q1 is expected to come in at $3.67 a share.

Thursday 16 March

Deliveroo full-year results

The Deliveroo share price appears to have found a base around the 80p area. There was a positive response to the Q3 trading update, despite the company downgrading its full-year guidance on sales growth. The uplift was welcome given that the shares are well below their 390p IPO price, which suggests that investor concerns may be priced in. Gross transaction value (GTV) increased 8% year-on-year, with the UK operation – up 11% – outperforming international markets. However, Deliveroo downgraded its full-year guidance on GTV growth to between 4% and 8% amid concerns over consumers’ disposable incomes. 

There was some good news as EBITDA margins were revised higher to between -1.2% and -1.5%, suggesting that the company is making progress on reducing its costs by way of lower marketing spend. In its Q4 update in January, the shares popped to a two-month high before sliding back again, after the company announced that it generated over £1bn in GTV in the UK for the first time, a rise of 9%, pushing total GTV up to £1.8bn. 

For the full year, Deliveroo said it expects GTV of just over £7bn across all operations, a rise of 7%. Adjusted earnings almost achieved breakeven during the second half of the year. This number is expected to continue to improve into the next fiscal year, with EBITDA margin revised up to -1%, from the previous range of -1.2% to -1.5%. In an attempt to streamline its operations further, Deliveroo exited Australia in January. 

Williams-Sonoma Q4 results

Shares in high-end kitchenware and home furnishings retailer Williams-Sonoma have trodden water in the last few months, but it remains a popular brand among wealthier US consumers. In Q3 the owner of Pottery Barn reported record revenue for the quarter of $2.19bn, beating forecasts. Profits fell slightly short of forecasts, although they were still up from a year ago at $3.72 a share. 

Amid concerns over the economic outlook, the retailer declined to reiterate its previous full-year guidance of mid- to high-single-digit annual net revenue growth. The company cited high levels of “macro uncertainty” and elevated inventories, sending the shares lower, although we’ve seen a modest recovery since then. Inventory levels are expected to come down in Q4, but they are still 33% above the levels they were at a year ago. Profits for Q4 are expected to come in at $5.46 a share.

FedEx Q3 results

After falling to a two-year low in September after a surprise profit warning, FedEx shares have slowly clawed their way back. The stock is up more than 40% from that September trough. 

In December FedEx beat downwardly revised Q2 expectations on profits, returning $3.18 a share, although the delivery company missed on revenue, which came in at $22.8bn. The better-than-expected profit was mainly due to the company increasing its prices and cutting costs in September. FedEx has said that it plans to cut another $1bn in costs on top of the $2.7bn it announced previously. 

The company also reinstated earnings guidance for the full year, announcing a new target of between $13 and $14 a share. The big jump in retail sales in the US in January bodes well for FedEx’s Q3 results, with profits expected to come in at $2.74 a share.

Friday 17 March

No major scheduled events

INDEX DIVIDEND SCHEDULE

Dividend payments from an index's constituent shares can affect your trading account. View this week's index dividend schedule.

SELECTED COMPANY RESULTS

MONDAY 13 MARCHRESULTS
BuzzFeed (US)Q4
Direct Line Insurance Group (UK)Full-year
Getty Images Holdings (US)Q4
Gitlab (US)Q4
Phoenix Group Holdings (UK)Full-year
Whole Earth Brands (US)Q4
TUESDAY 14 MARCHRESULTS
Close Brothers Group (UK)Half-year
Lulu's Fashion Lounge Holdings (US)Full-year
SentinelOne (US)Q4
WEDNESDAY 15 MARCHRESULTS
Adobe (US)Q1
Balfour Beatty (UK)Full-year
Prudential (UK)Full-year
Samsonite International (HK)Full-year
THURSDAY 16 MARCHRESULTS
Deliveroo (UK)Full-year
DFS Furniture (UK)Half-year
Dollar General (US)Q4
FedEx (US)Q3
Helios Towers (UK)Q4
Pensionbee Group (UK)Full-year
Rentokil Initial (UK)Full-year
Savills (UK)Full-year
Williams-Sonoma (US)Q4
FRIDAY 17 MARCHRESULTS
Life360 (AU)Full-year

Note: While we check all dates carefully to ensure that they are correct at the time of writing, company announcements are subject to change.


CMC Markets er en ‘execution-only service’ leverandør. Dette materialet (uansett om det uttaler seg om meninger eller ikke) er kun til generell informasjon, og tar ikke hensyn til dine personlige forhold eller mål. Ingenting i dette materialet er (eller bør anses å være) økonomiske, investeringer eller andre råd som avhengighet bør plasseres på. Ingen mening gitt i materialet utgjør en anbefaling fra CMC Markets eller forfatteren om at en bestemt investering, sikkerhet, transaksjon eller investeringsstrategi. Denne informasjonen er ikke utarbeidet i samsvar med regelverket for investeringsanalyser. Selv om vi ikke uttrykkelig er forhindret fra å opptre før vi har gitt dette innholdet, prøver vi ikke å dra nytte av det før det blir formidlet.

Hello, we noticed that you’re in the UK.

The content on this page is not intended for UK customers. Please visit our UK website.

Go to UK site

Før du går..

Prøv CFD-handel med en kostnadsfri demokonto. Få tilgang til vår innovative handelsplattform og test strategien din med 100 000 fiktive kroner.

cmc-mobile-trading-app