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Thursday preview: UK and US economic readings in focus

By Oliver Haill

Date: Wednesday 28 Mar 2018

LONDON (ShareCast) - (ShareCast News) - Thursday is the last day of the month and the last day before the four-day Easter weekend, but it's a fairly busy day in terms of economic data.
UK gross domestic product is due at 0930 BST, along with Bank of England mortgage and consumer credit data, and the January's index of services, while in Europe, the main event is German consumer price inflation.

Stateside, Stateside, Thursday will bring bring with it a barrage of economic indicators, including prints on personal income and spending for February, together with readings on consumer confidence from the University of Michigan and MNI Chicago factory sector PMI.

UK gross domestic product for the end of last year is expected to be confirmed at 0.4% on Thursday, though the Office for National Statistics last month's noted that the balancing adjustments used to calculate the different measures of growth were larger than usual.

This means we should be alert to the risk of revisions on this occasion, said economists at RBC Capital Markets, even if it might only be in the composition of GDP.

The ONS will also release the January index of services, providing an insight into how the first quarter is shaping up.

"Even though construction is a small sector, it has made such a weak start to the year that it will be even more important for the services sector to grow around 0.1-0.2% m/m throughout Q1 to get overall GDP growth into the 0.3-0.4% q/q range," RBC said.

Looking at US personal income and spending, the core PCE index is seen firming up to 1.6% year-on-year from 1.5%.

RBC said personal income and spending was "largely baked in" at this point with both employment and retail sales already in-hand for the month.

Economists saw spending print a modest 0.1% gain as core retail sales were on the soft side. "The end result is a higher savings rate. Note that it seems highly probable that the delay in tax refunds once again impacted February spending. Indeed, tax refunds were running a staggering $66 billion below normal through late February. Given what we know about economic fundamentals and the significant positive shock to cash flows in March we expect a pretty sizeable boost in consumption not only to close out 1Q, but in 2Q as well."

In terms of UK corporate results, plastic packaging group RPC Group reports with its shares down 22% from last autumn's highs.

"David Attenborough's campaign against plastic pollution in our oceans has not done the group any favours. And that's putting it mildly," says Hargreaves Lansdown analyst Nicholas Hyett, who admits to owning shares in the company. "Supermarkets have been pledging to cut plastic packaging left, right and centre, while a host of major consumer goods groups have pledged to move towards 100% reusable, recyclable or compostable packaging by 2025."

With demand for plastic packaging likely to fall, Hyett expects RPC's organic growth numbers to be closely watched, feeling organic revenue growth of over 3% in the final quarter of the year would be respectable, and if it can repeat the 4% posted in the third quarter, that would be a good result.

"RPC prides itself on its innovation, and given the increased complexity of fully recyclable products that could work in its favour. The group has also been investigating bio-polymers and compostable materials. We wouldn't be surprised if recent innovative success attracts comment."

Thursday March 29


Continuing Claims (US) (12:30)
Personal Income (US) (12:30)
Personal Spending (US) (12:30)
U. of Michigan Confidence (US) (14:00)
Unemployment Rate (GER) (08:00)


Consumer Credit (08:30)
Gross Domestic Product (08:30)
Index of Services (09:30)
M4 Money Supply (08:30)
Nationwide House Price Index (06:00)


BBGI SICAV S.A. (DI), BH Global Ltd. GBP Shares, Chesnara, Eddie Stobart Logistics , GAN, Quarto Group Inc., Wentworth Resources Ltd (DI)


DX (Group), Quarto Group Inc.


CMC Markets


BBGI SICAV S.A. (DI), BH Global Ltd. GBP Shares, National Express Group


3i Infrastructure, BioPharma Credit


4Imprint Group, 888 Holdings, Dragon-Ukrainian Properties & Development, Ferrexpo, Somero Enterprises Inc. (DI)


Adept4, Angus Energy , Aukett Swanke Group , Keras Resources , Stellar Diamonds, Zenith Energy LTD.Com Shs NPV (DI)


Blackrock Throgmorton Trust, Greencoat Renewables, Imperial Brands , Jersey Electricity 'A' Shares, LPA Group, SSP Group , Temple Bar Inv Trust, Triple Point Social Housing Reit


4Imprint Group, 888 Holdings, Bovis Homes Group, British Smaller Companies VCT 2, CLS Holdings, Devro, Downing Three VCT F Shs, Downing Two VCT F Shs , EMIS Group, Foreign and Colonial Inv Trust, HGCapital Trust, IDOX, InterContinental Hotels Group, Jardine Lloyd Thompson Group, Prudential, Sanne Group, Somero Enterprises Inc. (DI), Synectics, Wynnstay Group


Maven Income And Growth VCT 6 , Persimmon, Redde


Abbey, Craneware, Softcat, Standard Life Private Equity Trust


Aberdeen Diversified Income and Growth Trust, BP, Brunner Inv Trust, HICL Infrastructure Company Ltd, Honeycomb Investment Trust, MedicX Fund Ltd., NextEnergy Solar Fund Limited Red, Premier Global Infrastructure Trust, The Renewables Infrastructure Group Limited, Volta Finance Limited


British Land Company, Duke Royalty Limited, Real Estate Investors, SQN Asset Finance Income Fund Limited, Value and Income Trust