Thursday preview: ECB, Shell in focus

Analysts at Barclays Research expect that rate-setters will announce an extension in their so-called long-term refinancing operations past June and prepare to increase their PEPP bond buying programme.

The latter is widely expected to occur towards mid-2020 due to the acute need of euro area governments to ramp up bond sales to deal with the fallout from the coronavirus pandemic.

Indeed, on 23 April, Fitch Ratings was reportedly near to attaching a 'negative' outlook to Italy's long-term credit rating, which might have brought severe selling pressure to bear on the country's debt markets - although it finally demured.

On a related note, on Wednesday evening analysts at Rabobank told clients: "Going forward, while the ECB’s aggressive intervention is distorting the fundamental signal being transmitted by Southern European bond markets (as evidenced in their widening CDS bases), we continue to favour a widening of peripheral spreads as solvency concerns are likely to dominate even the bold liquidity salve offered via the PEPP as long as liability sharing of even a timebound or purely de facto form remains a red line for core policymakers."

Nevertheless, some German analysts said that it might be counterproductive for the ECB to make the same point on Thursday.

Jobs data on both sides of the Atlantic will also bear watching, with weekly US jobless claims due out in the afternoon (Barclays: 4.0m) and monthly data for March scheduled for release in Germany at 0855 GMT.

On the other side of the world, overnight China's National Bureau of Statistics will publish its factory sector Purchasing Managers' Index for April.

Analysts at UBS expect Royal Dutch Shell will put forth a robust defence of its dividend payout when it delivers its first quarter financials on Thursday.

"Our expectation is that Shell management will be robust defenders of their dividend through this cycle and we could envisage further capex cuts before it would contemplate and pull back from the cash dividend commitment," analyst Jon Rigby said.

And despite the firm's higher complexity versus peers, Rigby said the oil major's update had already been de-risked via the trading update provided at the end of March.

Indeed, the company's cash-flow may have gotten a boost from a working capital release on the back of falling oil prices which he estimated at roughly $6bn.

Lower oil prices likely also boosted margins in its oil products unit and the firm may have been "a major beneficiary" of oil trading conditions.

"Like Exxon Mobil, Shell noted improved sequential Chemicals margins but we include only a modest improvement in profitability," he added.

Rigby also noted how on 31 March Shell had flagged a "solid" quarter in liquid natural gas production and a normal quarter for LNG trading and optimisation.

Thursday 30 April

INTERIMS

Up Global Sourcing Holdings

INTERIM DIVIDEND PAYMENT DATE

Grit Real Estate Income Group Limited NPV (DI), Heavitree Brewery 11 1/2% Cum Prf , Tristel

INTERIM EX-DIVIDEND DATE

Royal Bank of Scotland 11% Cum. Prf, Royal Bank of Scotland 5.5% Cum. Prf., Seneca Growth Capital Vct, Seneca Growth Capital Vct B

QUARTERLY PAYMENT DATE

BMO Private Equity Trust, Ediston Property Investment Company, Middlefield Canadian Income PCC, Real Estate Investors

QUARTERLY EX-DIVIDEND DATE

JpMorgan China Growth & Income , JPMorgan Claverhouse Inv Trust, Supermarket Income Reit

FINALS

Morses Club , Ocean Outdoor Limited NPV (DI) , Sainsbury (J), Symphony Environmental Technologies, Westminster Group

SPECIAL DIVIDEND PAYMENT DATE

Billing Services Group Ltd., Pacific Alliance China Land Ltd.

SPECIAL EX-DIVIDEND DATE

Ferrexpo

EGMS

PJSC Centre For Cargo Container Traffic Transcontainer GDR (Reg S)

AGMS

Admiral Group, Billing Services Group Ltd., BlackRock World Mining Trust, British American Tobacco, Devro, Fisher (James) & Sons, Globaltrans Investment GDR (Reg S), Green Energy Technology Inc. GDR (Reg S), Greencoat UK Wind, Grupo Clarin SA GDR (Reg S), Hikma Pharmaceuticals, Kaz Minerals , Minoan Group, Mobile Streams, Network International Holdings, Octopus AIM VCT 2, Phoenix Copper Limited, Rockrose Energy, RPS Group, Schroders, Smurfit Kappa Group, Symphony International Holdings Ltd.

TRADING ANNOUNCEMENTS

Evraz, Howden Joinery Group, Kingspan Group, Lancashire Holdings Limited, Network International Holdings, Vivo Energy

FINAL DIVIDEND PAYMENT DATE

Octopus Titan VCT , Sureserve Group, Wynnstay Group

FINAL EX-DIVIDEND DATE

Curtis Banks Group, Derwent London, Harworth Group, Holders Technology, LLoyds Banking Group 9.25% Non-Cum Irredeemable Pref Shares, LLoyds Banking Group 9.75% Non-Cum Irredeemable Pref Shares, London Stock Exchange Group, Mortgage Advice Bureau (Holdings) , Octopus AIM VCT 2, Porvair

Q1

Apax Global Alpha Limited , Royal Dutch Shell 'A', Royal Dutch Shell 'B', Schroders, St James's Place