Wednesday preview: BoE money and credit report, euro inflation, IG update

Wednesday is a muted day in the business diary, with little major company news and a sprinkling of second-line economic data that will a give further reading on the consumer environment at home and over the channel, plus the Beige Book stateside.

On the microeconomic calendar is eurozone labour market data, while for the UK it's GfK's consumer confidence survey and mortgage approvals and consumer credit from the Bank of England.

The BoE money and credit report is expected to see consumer credit lending in April to soften to £1.5bn from £1.62bn to reflect weakening spending behaviour.

Cooling house prices are also seen as likely to increasingly weigh on mortgage lending, with the consensus for an easing to 66k approvals in the month.

"The housing market has been soft so far this year and we expect mortgage approvals to inch down for a third consecutive month in April," said HSBC's economists, though they noted that April is the month last year when a hike in buy-to-let stamp duty sent mortgage approvals sharply lower.

"So, even with a small further fall, they might still be up year-on-year. Apart from one bad month in December, consumer credit appears to be surviving the 2017 consumer downturn so far. We expect it to increase by another GBP1.5bn in April – in line with its 2016 average."

GfK's consumer confidence index was -7 in April, following two months at -6.

Confidence is seen softening further in May as inflation gathered pace.

"But in the absence of further outright reasons, confidence should be resilient and remain broadly in line with longer term averages," said Barclays, forecasting a reading of -8.

HSBC said the indicator has been relatively stable over the past few
months despite growing concerns about rising inflation and stagnating real wages, but observed that four out of the five contributing sub-indices fell, with expectations for the 'general economic situation' over the next 12 months falling by 1 point.

The bank therefore also forecast a further fall to -8 as confidence in the economic situation worsens "and as we expect resilient measures, such as the 'major purchase index' (increased by +1 in April) to also start to show the impact of rising inflation."

Eurozone inflation at 1000 BST euro area 'flash' HICP inflation for May is expected to ease back to 1.5% on a yearly basis from 1.9% in April and for core price growth to fall to 1.0% from 1.2%, as it excluded food, alcohol, tobacco and energy.

"We expect headline (HICP) inflation to drift lower in the coming months, converging towards core inflation by the end of next year," said Barclays, forecasting headline inflation will average
1.6% in 2017 and 1.3% in 2018, while core inflation will average 1.0% this year and 1.2% next.

"We continue to believe that underlying inflation pressures, after adjusting for short-term distortions due to calendar sensitive volatile components, remain subdued."

In corporate news, spread-betting, CFDs and stock broking firm IG Group is due to put out a trading statement.

Earlier this month house broker Numis cut its revenue and profit forecast as the VIX volatility index had been trading at a multi-decade low with volatility having been low for some time, which the broker saw hitting sales and them marketing and variable staff costs.

"We believe we have taken a cautious approach, having assumed that the current low market volatility continues all the way to the May period end… Low volatility for IG is the equivalent of lower markets for fund managers."

Final results from LondonMetric Property are also in the diary, following comments from the company in March about a target of 70% distribution assets in its portfolio weighting within a year, and with the multi-year rotation out of weaker retail assets into distribution
assets a major part of the investment case.

"While acquisition and development of new sheds will benefit the split, and it will be interesting to see if mgmt continues to see last mile logistics as the subsector with the greatest potential, in our view the ‘tail’ of the portfolio is equally important," said Numis, noting valuations of non-core office and residential properties Marlow and Moore House, which constitute circa 8% of the portfolio, fell -9.6% and -5.7% respectively.

"Management was clear on the use for equity proceeds, and while it is early days investors will look for a post period end update on both the deployment into developments and recent acquisitions and the outlook for the £30m set aside for pipeline acquisitions."

Wednesday May 31

INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Chicago PMI (US) (14:35)
Import Price Index (GER) (07:00)
MBA Mortgage Applications (US) (12:00)
Pending Homes Sales (US) (15:00)
Retail Sales (GER) (07:00)
Unemployment Rate (EU) (10:00)
Unemployment Rate (GER) (08:55)

UK ECONOMIC ANNOUNCEMENTS
Consumer Credit (08:30)
M4 Money Supply (09:30)
Mortgage Approvals (09:30)

FINALS
LondonMetric Property, Nature Group, Telford Homes

SPECIAL DIVIDEND PAYMENT DATE
Great Portland Estates

AGMS
Atlas Mara Limited (DI), Barr (A.G.), Central Asia Metals, Cluff Natural Resources, e-Therapeutics, F&C Commercial Property Trust Ltd., ICG-Longbow Senior Secured UK Property Debt Investments Ltd, Ingenta, Styles & Wood Group, Tekcapital

TRADING ANNOUNCEMENTS
IG Group Holdings, OPG Power Ventures, PJSC Centre For Cargo Container Traffic Transcontainer GDR (Reg S)

FINAL DIVIDEND PAYMENT DATE
Acacia Mining, Belvoir Lettings, Capital & Counties Properties , Empresaria Group, Equiniti Group , F&C Private Equity Trust, Ferrexpo, Hastings Group Holdings , London Stock Exchange Group, Lookers, Mortgage Advice Bureau (Holdings) , NAHL Group

INTERIM DIVIDEND PAYMENT DATE
Civitas Social Housing , Filta Group Holdings, Glencore

QUARTERLY PAYMENT DATE
City of London Inv Trust, Ediston Property Investment Company, Picton Property Income Ltd, TwentyFour Select Monthly Income Fund Limited