Wednesday preview: US jobs report, Vodafone in the spotlight

The market spotlight on Wednesday will be on US consultancy ADP's private sector payrolls report, which sometimes foreshadows the result of the official non-farm payrolls report released two days afterwards.

It is expected to show a sharp slowing in the pace of jobs growth in the States, from 807,000 hires in the last month of 2021 to just 208,000 in January.

Across the Channel, Eurostat is expected to report that the annual rate of consumer price inflation in the euro area slowed noticeably, from December's pace of 5.05 to 4.3%.

At the core level, harmonised CPI consensus is for a drop in the pace of price gains from 2.6% to 1.9%.

OPEC+ ministers are due to meet to decide on whether to go ahead with a planned further 0.4m barrel a day increase in their combined output.

On the corporate side of things, Vodafone is due to update shareholders on its fiscal third quarter performance.

According to UBS analyst Polo Tang, investors' focus will be on potential M&A activity involving the company, including for its tower unit.

"Specifically, we think investors will be seeking a reiteration that Vodafone does not intend to be an acquirer and will structure deals in a way that does not increase leverage," he added.

Investors were also expected to hone in on the company's expectations for the trajectory of service revenues in Europe and for capital expenditures.

The potential need to replace existing cable networks in Germany, as its competitors had done, was making some investors "wary", the analyst said.

Tang however believed Vodafone did not need to take a decision in the near-term.

Group service revenues are seen 2.1% higher, which would mark a slowdown from growth of 3.3% and 2.4% recorded over the first two quarters of the year.

UBS analyst Polo Tang meanwhile is expecting that the telecommunications outfit will reiterate its guidance for the full fiscal year for earnings before interest, taxes, depreciation and amortisation of €15.2-15.4bn, alongside free cash flow, excluding growth capital expenditures, in excess of €5.3bn.

Wednesday 2 February

TRADING ANNOUNCEMENTS

Glencore, Severn Trent, Vodafone Group

AGMs

Imperial Brands, Premier Miton Group, Edinburgh Worldwide Inv Trust

FINAL DIVIDEND PAYMENT DATE

Britvic, Aberdeen Standard Asia Focus

INTERIM DIVIDEND PAYMENT DATE

Mitie Group, Workspace Group

SPECIAL DIVIDEND PAYMENT DATE

Aberdeen Standard Asia Focus

UK ECONOMIC ANNOUNCEMENTS

BRC Shop Price Index (00:01)

INTERNATIONAL ECONOMIC ANNOUNCEMENTS

MBA Mortgage Applications (US) (12:00)

Crude Oil Inventories (US) (15:30)