Week ahead: Fed's interest rate decision, US and UK GDP

The Federal Reserve’s interest rate decision will be in the spotlight next week with the central bank widely expected to follow the lead from other central banks in keeping policy unchanged.

The Fed is expected to keep interest rates between 0.25% to 0.50% when they meet on 26-27 Jul despite sustained economic growth and a rise in inflation toward the 2% target.

However, the market sees a hike is likely on the cards at some point this year. Fed funds futures rates show investors project more than a 50% chance the central bank will raise rates at least once by its December meeting, according to CME Group's FedWatch tool.

In the June policy statement, the Fed noted that the pace of improvement in the labour market had slowed following a weak May non-farm payrolls report.

“We expect the July policy statement will be amended to reflect the latest monthly data showing a strong rebound in employment gains,” HSBC analysts said.

“However, we expect that the forward guidance elements of the statement will be unchanged, with the Committee continuing to expect ‘gradual adjustments’ in the stance of monetary policy.”

While many policymakers have said they should be patient before raising rates, some have indicated that another increase should happen sooner rather than later.

Atlanta Fed President Dennis Lockhart told reporters last week “I wouldn’t rule out as many as two” rate increases this year. He said markets had been “quite orderly” since Britain voted to leave the European Union on 24 June.

Separately, Dallas Fed President Robert Kaplan said he believed the Fed should be looking towards removing accommodation. “We just should do it in a patient, gradual way,” he said in an interview last week at the Official Monetary and Financial Institutions Forum.

The Fed last raised rates in December and has remained cautious since amid uncertainty on the global economic outlook and instability in financial markets.

“Although this is still the era of central bank caution, the Federal Reserve could be one of the first central banks to break away from the hypnotic spell of global anxieties by raising US interest rates in the future,” said FXTM research analyst Lukman Otunuga.

The Bank of England and European Central Bank both decided against taking policy action this month, saying they would wait for more information on the fallout from Brexit. Analysts expect the central banks will loosen monetary policy at their next meetings.

Meanwhile, the US will see the release of gross domestic product for the second quarter on Friday with analysts pencilling in a pick-up to an annualised 2.6% growth from 1.1% in the first three months of the year.

Annual revisions to US GDP, covering the first quarter of 2013 to the first quarter of 2016, will be published at the same time.

In the UK, the preliminary estimate of economic growth in the second quarter will also be in focus when released by the Office for National Statistics on Wednesday. HSBC analysts expect second quarter growth of 2.1% year-on-year and 0.5% quarter-on-quarter, compared to a respective 2.0% and 0.4% in the first quarter.

Monday 25 July

INTERIMS

Globaldata, Michelmersh Brick Holdings, XP Power Ltd. (DI)

INTERIM DIVIDEND PAYMENT DATE

Compass Group

QUARTERLY PAYMENT DATE

SQN Asset Finance Income Fund Limited C SHS NPV

INTERNATIONAL ECONOMIC ANNOUNCEMENTS

IFO Business Climate (GER) (09:00)

IFO Current Assessment (GER) (09:00)

IFO Expectations (GER) (09:00)

GMS

Bond International Software

FINALS

Great Eastern Energy Corp Ltd. GDR, Tungsten Corporation

ANNUAL REPORT

Gresham House Strategic

AGMS

Clear Leisure, Helical Bar, Independent Resources, Jiasen International Holdings Ltd, Kenmare Resources, MobilityOne Ltd., MX Oil, National Grid, Origo Partners , Proxama

TRADING ANNOUNCEMENTS

Petra Diamonds Ltd.(DI)

UK ECONOMIC ANNOUNCEMENTS

CBI Industrial Trends Surveys (11:00)

Nationwide House Price Index (07:00)

FINAL DIVIDEND PAYMENT DATE

Fuller Smith & Turner, Gabelli Value Plus Trust , Mediclinic International

Tuesday July 26

INTERIMS

Capital & Counties Properties , Drax Group, GKN, Huntsworth, Jardine Lloyd Thompson Group, Man Group, Provident Financial, SEGRO, Tyman

INTERNATIONAL ECONOMIC ANNOUNCEMENTS

Consumer Confidence (US) (15:00)

Import Price Index (GER) (07:00)

New Homes Sales (US) (15:00)

Q2

BP

FINALS

Games Workshop Group, PZ Cussons

AGMS

Acal, Calculus VCT 'C' Shares, GB Group, Globalworth Real Estate Investments Limited, Green Dragon Gas Ltd. (DI), Greka Drilling Ltd (DI), Halfords Group, Puma Vct 11, Red Leopard Holdings, Redcentric, SerVision, TR Property Inv Trust, VP

TRADING ANNOUNCEMENTS

Acal

UK ECONOMIC ANNOUNCEMENTS

BBA Mortgage Lending Figures (09:30)

FINAL DIVIDEND PAYMENT DATE

Coca-Cola HBC AG (CDI), Electrocomponents, Fidelity China Special Situations , Vertu Motors

Wednesday 27 July

INTERIMS

Burford Capital , Dignity, ITV, Jupiter Fund Management , Lancashire Holdings Limited, PJSC Megafon GDR (Reg S), Quartix Holdings , Rightmove, Shawbrook Group, Staffline Group, Tarsus Group, Tullow Oil

INTERIM DIVIDEND PAYMENT DATE

Netcall

QUARTERLY PAYMENT DATE

Assura

INTERNATIONAL ECONOMIC ANNOUNCEMENTS

Crude Oil Inventories (US) (15:30)

Durable Goods Orders (US) (13:30)

GFK Consumer Confidence (GER) (07:00)

M3 Money Supply (EU) (09:00)

MBA Mortgage Applications (US) (12:00)

Pending Homes Sales (US) (15:00)

Q2

Antofagasta, ARM Holdings, GlaxoSmithKline, Lancashire Holdings Limited, PJSC Megafon GDR (Reg S)

FINALS

Renishaw

SPECIAL DIVIDEND PAYMENT DATE

Arbuthnot Banking Group, Secure Trust Bank, Stock Spirits Group

EGMS

Ryanair Holdings

AGMS

British Smaller Companies VCT, Circle Oil, Flybe Group, Invesco Income Growth Trust, Market Tech Holdings Limited , Norcros, Providence Resources, Snoozebox Holdings, Trifast, Weiss Korea Opportunity Fund Ltd, Xcite Energy Ltd. (CDI)

TRADING ANNOUNCEMENTS

Mitchells & Butlers

UK ECONOMIC ANNOUNCEMENTS

CBI Distributive Trades Surveys (11:00)

GDP (Preliminary) (09:30)

Index of Services (09:30)

Thursday 28 July 28

INTERIMS

Anglo American, AstraZeneca, BAE Systems, British American Tobacco, Centrica, COLT Group SA, Dairy Farm International Holdings Ltd. (Singapore), Genel Energy, Greencoat UK Wind, Henderson Group, Hongkong Land Holding Ltd. (Sing.Reg), Informa, Intu Properties, Just Eat , Lloyds Banking Group, Mandarin Oriental International (Singapore), Merlin Entertainments , Relx plc, Rentokil Initial, Rolls-Royce Holdings, Royal Dutch Shell 'A', Royal Dutch Shell 'B', Smith & Nephew, Telefonica SA, Torchmark Corp.

INTERIM EX-DIVIDEND DATE

Blackrock Throgmorton Trust, Entu (UK) , Nichols, Porvair, Sanderson Group

QUARTERLY PAYMENT DATE

Land Securities Group

QUARTERLY EX-DIVIDEND DATE

City of London Inv Trust

INTERNATIONAL ECONOMIC ANNOUNCEMENTS

Business Climate Indicator (EU) (10:00)

Consumer Confidence (EU) (10:00)

Continuing Claims (US) (13:30)

Economic Sentiment Indicator (EU) (10:00)

Industrial Confidence (EU) (10:00)

Initial Jobless Claims (US) (13:30)

Unemployment Rate (GER) (08:55)

Q2

AstraZeneca, Royal Dutch Shell 'A', Royal Dutch Shell 'B', Smith & Nephew, Torchmark Corp.

Q3

Thomas Cook Group

GMS

Nostra Terra Oil & Gas Co

FINALS

Diageo, Sky

SPECIAL EX-DIVIDEND PAYMENT DATE

Tristel

AGMS

Boussard & Gavaudan Holding Ltd. EUR Shares, Boussard & Gavaudan Holding Ltd. GBP Shares, DJI Holdings, Dods (Group) , Elektron Technology, EPE Special Opportunities, GoldStone Resources Ltd, Immunodiagnostic Systems Holdings, Montanaro European Smaller Companies Trust, PayPoint, Record, SKIL Ports & Logistics Ltd., Triple Point Income VCT

TRADING ANNOUNCEMENTS

Compass Group

FINAL DIVIDEND PAYMENT DATE

Big Yellow Group, Caffyns, Impellam Group, Mckay Securities, Norcros, Vianet Group

FINAL EX-DIVIDEND DATE

Aquatic Foods Group , Bilby, City of London Investment Trust 4.2% Non-Cum 2nd Prf Stk, Investec, SSE, UK Mail Group , Walker Crips Group

Friday 29 July 29

INTERIMS

Berendsen, Essentra, FBD Holdings, Foxtons Group , International Consolidated Airlines Group SA (CDI), International Consolidated Airlines Group SA (CDI), Jardine Matheson Holdings Ltd (Singapore Reg), Jardine Strategic Holdings Ltd. (Singapore), UBM

INTERIM DIVIDEND PAYMENT DATE

BP 9% 2nd Prf, CC Japan Income & Growth Trust, Character Group, Chrysalis VCT, Dunedin Smaller Companies Inv Trust, Sherborne Investors (Guernsey) 'B' Limited

QUARTERLY PAYMENT DATE

Ediston Property Investment Company, Funding Circle SME Income Fund, GLI Alternative Finance , Middlefield Canadian Income PCC, Real Estate Investors, Schroder Income Growth Fund, TwentyFour Select Monthly Income Fund Limited

INTERNATIONAL ECONOMIC ANNOUNCEMENTS

Consumer Price Index (EU) (10:00)

Retail Sales (GER) (07:00)

Unemployment Rate (EU) (10:00)

SPECIAL DIVIDEND PAYMENT DATE

Chrysalis VCT

EGMS

OJSC Phosagro GDR (Regs)

AGMS

B&M European Value Retail S.A. (DI), Charles Stanley Group, China New Energy Limited, Gear4music (Holdings), Hansa Trust, Plastics Capital, Polar Capital Holdings, Stratmin Global Resources, Vodafone Group

UK ECONOMIC ANNOUNCEMENTS

Consumer Credit (09:30)

GFK Consumer Confidence (00:05)

M4 Money Supply (09:30)

Mortgage Approvals (09:30)

FINAL DIVIDEND PAYMENT DATE

Acal, Anpario, B.P. Marsh & Partners, Bisichi Mining, Braemar Shipping Services, Brown (N.) Group, CML Microsystems, Edinburgh Inv Trust, Helical Bar, Hogg Robinson Group, Indivior, NetDimensions (Holdings) Limited (DI), Palace Capital , PayPoint, Royal Mail, Shanks Group, Tate & Lyle, Telecom Plus