London pre-open: US consumption spending, German GDP in focus

Stocks were being called to start the session slightly lower ahead of key economic data due out later in the day Stateside, with traders mulling over the latest Fedpseak overnight.

Speaking in the afternoon, one of the best-known doves at the US central bank, Eric Rosengren, the president of the Federal Reserve bank of Boston, told investors financial markets were under-pricing the likelihood of interest rate hikes by the Fed.

His remarks surprised some market observers.

Early on Friday morning, Germany's finance ministry reported the country's economy started the year very much on fron-foot, with gross domestic product expanding at a very strong pace of 0.7% quarter-on-quarter (consensus: 0.6%).

Retail sales and consumer confidence numbers scheduled for release later in the session in the US would also help investors to take the pulse of the US consumer.

"Consumer spending numbers haven’t exactly blown people away over the last year which may be one of the key reasons why markets just can’t get on board with the need for the Fed to continue raising rates. Prior to this, people looked at consumer sentiment data as being one of the reasons why we could see spending pick up but even this has now come off its highs and the trend has been one of sentiment declining since the start of 2015, not improving," said Craig Erlam, Senior Market Analyst at Oanda.

Coca Cola HBG takes hit from FX moves

Weak emerging country currencies and a strong euro combined to hit sales at bottler Coca-Cola HBG, with net sales revenues down 2.7% to €1.3bn in the first quarter. On a constant currency basis, sales rose 2%. The company reported good growth in Nigeria, Romania and Poland, which offset a weak performance in Russia. Volume sales were flat at 439m cases, helped by increases in developing and emerging markets. Chief executive Dimitris Lois said pricing remained weak, particularly in the Czech Republic and Poland.

Megabrewers Anheuser-Busch InBev and FTSE 100-traded SABMiller did some asset-shuffling with Brazilian brewer Ambev this week, ahead of their proposed combination of the British and Belgian companies. AB InBev confirmed it has entered into an agreement with Ambev, in which it will transfer SABMiller’s Panamanian business to Ambev in exchange for Ambev’s Colombian, Peruvian and Ecuadorian businesses. The board of AB InBev said this will allow it to focus on countries where the SABMiller business it acquires and combines with are well-established, and allow Ambev to initiate operations in Panama through the established SABMiller business and further expand in Central America.