Tuesday preview: Euro area GDP, BP in focus

The focus in financial markets will be on a preliminary reading for euro area gross domestic product in the last quarter of 2020.

Consensus is for a quarter-on-quarter drop of 1.4% following the 12.4% rebound witnessed over the preceding three months.

On home shores meanwhile, the sole data point of interest will be mortgage lender Nationwide's house price index for January.

Economic data releases in the US will also scarce, with the spotlight likely to be on Loretta Mester, the head of the Federal Reserve bank of Minneapolis, as she delivers a speech on the labour market.

Further afield, rate-setters in Australia are due to meet to decide on monetary policy.

On the corporate side of things and for BP's fourth quarter results, UBS analyst Jon Rigby has penciled in a 16% year-on-year drop in production, excluding the contribution from its stake in Rosneft.

Nevertheless, the main drivers of that drop would be higher maintenance and the sale of some of the assets of L48 BPX, the trading name for the outfit's US arm, as well as assets in Alaska and offshore Egypt.

The contribution from Rosneft however was expected to have increased "significantly" quarter-on-quarter, thanks in part to exchange rate movements.

The group's net debt meanwhile was seen falling by roughly $3bn to around $37.5bn thanks to higher than expected oil prices.

That, said Rigby, should allow BP to restart share buybacks in the last quarter of 2021.

Regarding the company's new strategic direction, Rigby said: "the prospect of BP's debt levels allowing for the start-up of share buybacks around 4Q21. BP's strategic 2020 shift towards becoming an integrated energy company received a mixed reception from investors. We think this can be traced to some nervousness around the economic outcomes from the investment into renewable activity and the scale of this shift.

"We also see it as a concern over the scale of the exit from Upstream (which continues to be the primary incentive for mainstream to invest). We therefore expect some management attention devoted to arguing the case for value over volume Upstream and providing further proof points on renewable economics."

Tuesday February 02

INTERIMS

Filtronic, NWF Group

INTERNATIONAL ECONOMIC ANNOUNCEMENTS

Auto Sales (US) (20:30)

GDP (Preliminary) (EU) (10:00)

Q4

BP

FINALS

BP, IDOX, Sureserve Group

AGMS

Agronomics Limited, Blackrock Frontiers Investment Trust, JPMorgan Indian Investment Trust, Scottish Inv Trust

TRADING ANNOUNCEMENTS

Gem Diamonds Ltd. (DI), SSE, Virgin Money UK

UK ECONOMIC ANNOUNCEMENTS

Nationwide House Price Index (07:00)