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With the market’s mood darkening, will the Bank of England step in and give UK stocks a boost this week?

UK: Asset purchase programme set to continue

While the central bank continues to mull over the prospect of negative interest rates, the expectation is that Andrew Bailey’s Bank of England will expand its asset purchase programme.

Back in March it pumped £200 billion into the bond-buying scheme. But with most of that now spent, it seems that Threadneedle Street feels it is time for another injection. After all, the OECD has said that the UK is going to be the worst hit ‘developed’ nation when it comes to a covid-19 recession.

Investors will also be keeping an idea on the voting patterns of the MPC, namely whether Thursday’s interest rates decision is unanimous.

Beyond the BoE, it is a stacked week for UK data. On Tuesday the country will finally get a jobs report that more accurately reflects the impact of the pandemic. The unemployment rate, which sat at 3.9% for the 3 months to March, will take April into account – i.e. the first full month under lockdown. The same goes for the average earnings index.

As for the monthly claimant count change reading, April’s far worse than forecast 856,500 is the new benchmark heading into the May reveal.

Inflation, which fell to 0.8% last month, comes on Wednesday, followed by the  retail sales and public sector net borrowing numbers on Friday.

US: Chinese data to set the tone

The tone of trading for the US, and the rest of the market, may well be set by the China’s data dump that comes early on Monday morning, when the fixed asset investment, industrial production, retail sales and unemployment rate readings are released.

After that the US sees the Empire State manufacturing index on Monday, retail sales and industrial production on Tuesday, building permits and housing starts on Wednesday, jobless claims and the Philly Fed manufacturing index on Thursday, and the current account on Friday.

Eurozone: Region-wide trade balance

There’s plenty for the Eurozone to work with this week. The region-wide trade balance figure is released on Monday, and could prove to be illustrative given the panic caused by the recent German numbers.

Tuesday then sees the ZEW economic sentiment readings joined by the latest German inflation number, while on Wednesday there’s the CPI data for the Eurozone as a whole. Italy produces its trade balance figures on Thursday, followed finally by German PPI on Friday.

This article is brought to you in association with Spreadex. All opinions expressed in this article are from the author and do not necessarily represent the opinions of The Armchair Trader. You can find out more about Spreadex products and services here, or find more articles from Connor Campbell here.

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Please note this article does not constitute investment advice. Investors are encouraged to do their own research beforehand or consult a professional advisor.

Connor Campbell

Connor Campbell

Connor joined Spreadex in 2014 as part of a newly expanded financial analyst team after graduating from the University of Southampton with an MA in English. His focus is on providing Spreadex's customers with up-to-date and informative news, and is responsible for the market analysis found on the Spreadex website.

Connor produces three daily market updates, a daily stock earnings preview, a weekly financial market preview piece every Friday, a round-up of all the big financial stories making the weekend press every Monday morning and regular stock market features.

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