UK holds local elections and Fed sets rates

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Hello and welcome to the working week.

It’s Britain’s turn in the 2024 year of democracy. The local and mayoral elections in England and Wales on Thursday will decide who runs London and the country’s next two biggest cities — Birmingham and Manchester.

They could well bring a day of reckoning for Prime Minister Rishi Sunak before his ultimate day of reckoning, the general election, expected later this year. If the Conservatives lose more than 500 seats in the local authorities up for grabs and Labour take their flagship metro mayoral posts in Tees Valley and the West Midlands (containing Birmingham), a call from Tory MPs for a vote of no confidence will be very much in play.

We also have this explainer by our parliamentary and economics team on Sunak’s general election-date dilemma.

The Financial Times will be keeping you abreast of developments as the voting begins on Thursday. Next week you can join the journalists behind the award-winning Inside Politics newsletter and Political Fix podcast for an expert Q&A to digest the results. Register here for free to watch live on May 8 at 1-2pm UK time.

The main economic item this week is the US Federal Reserve’s rate-setting decision, announced on Wednesday, though (spoiler alert) the committee is unlikely to alter course this time round as inflation is not easing as quickly as the Fed was hoping. Investors now expect a rate cut later in the year, perhaps even after November’s US presidential election.

Attention will focus on the words of Fed chair Jay Powell after the meeting. Marc Ostwald, chief economist and global strategist at ADM Investor Services International, says: “It will be interesting to note whether Powell focuses more on headline growth or the overall strength of domestic demand, particularly as the drag from net exports was all about the strength of imports rather than weakness in exports.” For greater insights on Powell’s challenge, read this from the excellent (premium subscriber) FT newsletter Chris Giles on Central Banks.

There is a generous run of other economic data, including fresh US employment figures on Friday and international economic comparisons from manufacturing purchasing managers’ index figures, split because of the Labour day public holidays in several countries on Wednesday. Japan has industrial production and employment updates, while from the EU we’ll get preliminary first-quarter GDP estimates for the entire trade bloc as well as the lead economies France and Germany.

The wellspring of company earnings reports will continue to spurt out announcements this week, notably Amazon.com, Apple, HSBC, Samsung and Shell, though eyes will also be on the annual meetings too, notably takeover target Anglo American on Tuesday.

One more thing . . . 

We’ve only just got through Easter and another public holiday beckons with May Day commemorated in numerous countries around the world. It means stock market activity will dip in the middle of the week, and some world leaders, such as France’s Emmanuel Macron, will be glad of a quieter day than previous years.

Others look forward to a long holiday weekend. I will be spending part of mine working on my start-up venture, my allotment. However you spend yours, I hope you have a good one.

Thank you to those who have shared about their priorities in terms of corporate and economic news, and for the tips about travel in Suffolk. What are your interested in hearing more, or less, about? Email me at [email protected] or, if you are reading this from your inbox, hit reply.

Key economic and company reports

Here is a more complete list of what to expect in terms of company reports and economic data this week.

Monday

• Germany: preliminary consumer price index (CPI) and harmonised index of consumer prices (HICP) inflation rate data

• Israel: Last Day of Passover (Pesach) public holiday. Financial markets closed

• Japan: Shōwa Day. Financial markets closed

• UK: Zoopla monthly House Price Index

• Results: Beazley Q1 trading update, Domino’s Pizza Q1, Lottomatica Q1, NXP Semiconductors Q1, ON Semiconductor Q1, Oxford BioMedica FY, Paramount Q1, Philips Q1, Vivendi Q1 revenues

Tuesday

• EU, France, Germany, Italy, Spain: preliminary Q1 GDP estimate

• Germany: March labour market figures

• Singapore: IMF Regional Economic Outlook for Asia and Pacific

• UK: quarterly government debt and deficit estimate and latest British Retail Consortium Shop Price Index

• US: Conference Board consumer confidence data

• Results: 3M Q1, Adidas Q1, Advanced Micro Devices Q1, Air France-KLM Q1, Amazon.com Q1, Archer Daniels Midland Q1, Banco Santander Q1, Capgemini Q1 revenues, Coca-Cola Q1, Corning Q1, Eli Lilly Q1, Glencore Q1 production report, Hargreaves Lansdown Q3, Howden Joinery Group trading update, HSBC Q1, Lufthansa Q1, McDonald’s Q1, Mercedes-Benz Q1, Molson Coors Q1, Mondelez International Q1, OMV Q1, PayPal Q1, Pinterest Q1, Prudential Financial Q1, St James’s Place Q1 new business announcement, Samsung Electronics Q1, Starbucks Q2, Stellantis Q1, Thales Group Q1, Volkswagen Q1, Whitbread FY

Wednesday

• China, France, Germany and South Korea, among other countries: Labour day. Financial markets closed

• Canada, Japan, UK, US: S&P Global manufacturing purchasing managers’ index (PMI) data

• UK: Nationwide April House Price Index (7am local time)

• US: Federal Reserve interest rate announcement

• Results: AIG Q1, Aston Martin Lagonda Q1, Computacenter Q1 trading update, CVS Health Q1, eBay Q1, Estee Lauder Q3, Etsy Q1, GSK Q1, Haleon Q1, Kraft Heinz Q1, Marriott International Q1, Mastercard Q1, MGM Resorts International Q1, Mitsui & Co FY, Next Q1 trading statement, Pfizer Q1, Qualcomm Q2, Smith & Nephew AGM and trading update, YUM! Brands Q1

Thursday

• OECD Economic Outlook

• Brazil, EU, France, Germany, India, Italy, Poland, Russia, Spain, South Korea: S&P Global/HSBC/HCOB manufacturing PMI data

• France: OECD ministerial council meeting in Paris, chaired by Japan.

• Georgia: the Asian Development Bank’s annual meeting begins in Tbilisi

• Japan: Bank of Japan publishes the monetary policy meeting minutes

• US: monthly factory orders data

• Results: Allstate Q2, Apple Q2, ArcelorMittal Q1, ConocoPhillips Q1, Co-operative Bank Q1, Expedia Q1, Hiscox Q1, ING Q1, Melrose Industries AGM and trading statement, MetLife Q1, Moderna Q1, Moody’s Q1, Morgan Sindall AGM and trading statement, Reach AGM and trading statement, Shell Q1, Smiths News HY, Standard Chartered Q1, Stanley Black & Decker Q1, Universal Music Group Q1

Friday

• Canada, UK, US: S&P Global services PMI data

• EU: unemployment rate

• France: monthly industrial production figures

• Japan: Constitution Day. Financial markets closed

• US: April employment figures

• Results: AES Q1, Crédit Agricole Q1, Hershey Q1, Ingersoll Rand Q1, InterContinental Hotels AGM & trading statement, Legrand Q1, Société Générale Q1, Trainline FY

World events

Finally, here is a rundown of other events and milestones this week.

Monday

• Japan: Golden Week begins

• Togo: parliamentary and regional elections

• Spain: Prime Minister Pedro Sánchez due to announce whether he will resign from office following an accusation against his wife, Begoña Gómez, of an alleged case of corruption. Last week he said he was considering quitting

• UK: former Scottish first minister Nicola Sturgeon appears before Westminster’s Scottish Affairs Committee to answer questions on intergovernmental relations

• The IMF’s executive board meets to discuss the approval of $1.1bn funding for Pakistan, the last tranche of a $3bn standby arrangement secured last summer to avert a sovereign default and which runs out this month

Tuesday

Wednesday

• EU: 20th anniversary of the trade bloc enlarging to 25 member states from 15 as Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia joined

• UK: London’s annual May Day rally. Among the speakers, mainly union leaders, will be Palestinian ambassador to the UK Husam Zomlot

Thursday

• UK: local elections in England and Wales, including for 10 metro mayors. A by-election will also be held for the Westminster seat of Blackpool South. Results will be announced the next day. Read more here

Friday

Saturday

• Italy: 107th annual Giro d’Italia men’s cycling race launches with stage one, marking the first Grand Tour of the season ahead of the Tour de France and Vuelta a España

• US: Berkshire Hathaway annual shareholders meeting in Omaha, led by chair and chief executive Warren Buffett. More than 40,000 shareholders normally attend

Sunday