Weekly outlook: ECB to make interest rates decision and Associated British Foods reports

Key events for UK wealth managers for the week starting 11 September

ECB president Christine Lagarde addresses the audience during the ECB Governing Council Press Conference on 2 February 2023, Frankfurt, Germany.
Christine Lagarde. Copyright: Adrian Petty/ECB/Flickr


Monday 11 September

  • First-half results from Vistry
  • In the US, quarterly results from Oracle

Tuesday 12 September

  • First-half results from Wickes, Dowlais, IQE, Fever-Tree Drinks, The Gym Group and Harworth
  • UK unemployment and wage growth figures
  • Associated British Foods full-year results

On Tuesday, Associated British Foods will release a full-year trading update. The retailer owns Primark, British Sugar, Twinings and Ovaltine.

Ahead of the results, Hargreaves Lansdown equity analyst Aarin Chiekrie said: “In June, revenue at the key Primark business grew at double-digit rates thanks to higher prices and volumes. Market share’s also been on the rise in the UK, as some consumers moved to lower-priced clothing to help ease the pressure on their wallets. And, with all other business divisions growing the top line too, Associated British Foods expects full-year underlying operating profits to be moderately ahead of the previous year.

“Next week’s trading statement should give some insight into how well cash flows are being managed. Spending £140m on share buybacks and increasing inventory levels in the Sugar and Primark businesses free cash flow turned negative in the first half.

“Analysts are hoping to see that a good chunk of those stockpiles have unwound over the second half, helping to push cash flows back in the right direction. But just how much progress has been made by next week’s results will likely have a direct impact on the group’s ability to fund future dividends and share buybacks, and no shareholders returns are guaranteed.”

  • German ZEW economic conditions survey
  • US NFIB smaller companies business conditions survey

Wednesday 13 September

  • Full-year results from Redrow, Pan African Resources and Ricardo
  • First-half results from Tullow Oil, Burford Capital and Central Asia Metals
  • UK GDP growth figures
  • UK construction, manufacturing and industrial output figures
  • US consumer price inflation
  • US oil inventories
  • US Federal Budget balance
  • In Europe, quarterly results from Inditex

Thursday 14 September

  • Full-year results from MJ Gleeson and Kier
  • First-half results from Spire Healthcare, M&C Saatchi, THG, Keystone Law and Churchill China
  • Trading statement from Trainline
  • European Central Bank policy decision

The European Central Bank will convene this week to make its next decision on interest rates, with president Christine Lagarde (pictured) set to announce the central bank’s next monetary policy action on Thursday.

AJ Bell head of financial analysis Danni Hewson and investment director Russ Mould said: “After higher-than-expected inflation readings from both Germany and Spain, not to mention some tough talk from policymakers at the Jackson Hole symposium, markets are getting nervous about just how high interest rates could go and for how long they could then stay there.

They added: “Since its first interest rate increase of this cycle last July, the ECB has swiftly jacked up its Main Refinancing Rate to 4.25% from zero.

“It has also started the process of Quantitative Tightening. That started at a run rate of €15 billion a month in March and has since been increased to €28 billion a month from July 2023 to May 2024. That faster pace should see the ECB’s total asset holdings drop by €310 billion by the end of next spring.”

“No change is expected in QT for this meeting, but after President Lagarde’s warning over inflation volatility and the upside risks to further price increases, economists expect the ECB to sanction another one-quarter point in the Main Refinancing Rate to 4.50%. Any comments on the future trajectory of interest rates will also be important, as that might help to set the scene for the US Federal Reserve on 20 September and the Bank of England on 21 September.”

  • US product price inflation
  • US retail sales
  • UK weekly initial unemployment claims
  • In the US, quarterly results from Adobe and Lennar

Friday 15 September

  • First-half results from Videndum and Anglo Asian Mining
  • Chinese monthly retail sales, fixed asset investment and industrial production growth data
  • US industrial production and capacity utilisation

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