Wednesday preview: US Fed, services PMIs in the spotlight

All eyes on Wednesday will be on the US central bank to see whether rate-setters follow through on their recent accelerated plans for tightening policy or even go a bit further.

The Federal Open Market Committe is widely expected to hike the target for official short-term interest rates to a range of between 0.75-1.0%. Indeed, three more such hikes are anticipated for the the following three meetings as well.

In parallel, policymakers are expected to announce that balance sheet run-off will start in June at a pace of $35bn in that month, rising to a maximum pace of $95bn per month from August onwards.

However, Michael Hewson, chief market analyst at CMC Markets UK, points out the possibility that the Fed may act more quickly on both interest rates and balance sheet run-off.

"The biggest question will be around the pace of its balance sheet reduction program along with the pace of subsequent rate hikes," Hewson said.

"Powell's comments at the IMF that the Fed could well go much harder, and a lot quicker on rate hikes has prompted concern that the Fed may well overplay its hand on rate hikes at a time when the global economy looks set for a sustained slowdown as China continues to lose its battle with Covid."

Also due out in the US and euro area are the results of the latest services sector Purchasing Managers' Indices, this time for the month of April.

On home shores meanwhile, investors will be waiting on the release of consumer credit data for March from the Bank of England at 0930 GMT.

Worth noting, the Bank of England's policy meeting scheduled for the next day won't be far from their minds.

Wednesday 04 May

INTERIM DIVIDEND PAYMENT DATE

Manchester & London Investment Trust

QUARTERLY PAYMENT DATE

British American Tobacco

INTERNATIONAL ECONOMIC ANNOUNCEMENTS

Balance of Trade (GER) (07:00)

Balance of Trade (GER) (07:00)

Crude Oil Inventories (US) (15:30)

Current Account (GER) (07:00)

ISM Prices Paid (US) (15:00)

ISM Services (US) (15:00)

MBA Mortgage Applications (US) (12:00)

FINALS

Dianomi , e-Therapeutics, Inspiration Healthcare Group

AGMS

Barclays, GlaxoSmithKline, Gran Tierra Energy Inc. (CDI), Just Eat Takeaway.Com N.V. (CDI), MPAC Group, Ocado Group, Standard Chartered, Ten Entertainment Group , Tribal Group, Tritax Big Box Reit , Tritax Big Box Reit , Tritax Big Box Reit , Unilever

TRADING ANNOUNCEMENTS

Direct Line Insurance Group, Flutter Entertainment (CDI)

UK ECONOMIC ANNOUNCEMENTS

BRC Shop Price Index (00:01)

Consumer Credit (09:30)

Consumer Credit (09:30)

M4 Money Supply (09:30)

M4 Money Supply (09:30)

Mortgage Approvals (09:30)

FINAL DIVIDEND PAYMENT DATE

CareTech Holding, Maven Income and Growth VCT 5, NATWEST GROUP PLC ORD 100P, SEGRO