Thursday preview: BoE announcement, Sainsbury's results eyed

(Sharecast News) - The highlight of Thursday's session will be the latest policy announcement from the Bank of England, with half-year results from supermarket chain Sainsbury's also in focus. Kathleen Brooks, research director at XTB, said the market does not expect any change to interest rates and the focus instead will be on the Bank's updated forecasts for CPI and GDP.

"The UK interest rate swaps market is pricing in less than a 30% chance of a cut at this meeting, instead the market expects the BOE to hold off cutting rates until February," she said.

"The pound was the weakest performer in the G10 FX space last week, so confirmation that the BOE won't cut rates could see a small bounce in the pound later this week.

"While a rate cut is unlikely there has been a spate of weak economic data that means a surprise cut cannot be ruled out. Inflation remains at 3.8%, still unacceptably high for the BOE, in our view. However, crucially, the BOE expected inflation to peak in September at 4%. It will be interesting to see if the BOE downgrades its CPI forecast due to this, since inflation never reached its peak of 4%.

"Will the Bank instead say that price growth will moderate from here and reach the target 2% rate before 2027? If yes, then this could give the green light for a rate cut in February. If the BOE does err on the dovish side without cutting rates this week, then the downside for the pound could be limited, due to recent weakness in sterling and the sharp decline in UK Gilt yields."

As far as Sainsbury's is concerned, Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said investors don't think price competition has been as intense as the sector had feared at the start of the year.

"Helped by growing real wages, UK consumers are proving resilient," he said.

"And if Sainsbury's can keep growing volumes and gaining market share, there could be room for management to upgrade its cautious full-year guidance. For the first half, the consensus points towards retail underlying operating profit of around £500 million."

Half-year results are also due from Auto Trader, along with third-quarter numbers from AstraZeneca, a Q3 update from Smith & Nephew, and trading updates from Howden Joinery and Vistry.

In Europe, third-quarter results from Rheinmetall, Commerzbank and Banca Monte dei Paschi di Siena are due.

Thursday November 06

INTERIMS

Auto Trader Group , National Grid, Sainsbury (J), Tate & Lyle

INTERIM DIVIDEND PAYMENT DATE

Bodycote

INTERIM EX-DIVIDEND DATE

Airtel Africa , BlackRock Smaller Companies Trust, Bytes Technology Group , Card Factory, Me Group International, Octopus AIM VCT 2, Warpaint London

QUARTERLY EX-DIVIDEND DATE

Chenavari Toro Income Fund Limited NPV, Custodian Property Income Reit, JPMorgan India Growth & Income, Picton Property Income Ltd, Unilever

INTERNATIONAL ECONOMIC ANNOUNCEMENTS

Continuing Claims (US) (13:30)

Industrial Production (GER) (07:00)

Initial Jobless Claims (US) (13:30)

Producer Price Index (EU) (10:00)

Retail Sales (EU) (10:00)

Wholesales Inventories (US) (15:00)

Q3

AstraZeneca, Helios Towers , TBC Bank Group, Wheaton Precious Metals Corp.NPV (CDI)

GMS

Atlantic Lithium Limited NPV (DI), Bellevue Healthcare Trust (Red), Petra Diamonds Ltd.(DI)

SPECIAL EX-DIVIDEND DATE

Abrdn Property Income Trust Limited , Goodwin Plc, Softcat

AGMS

Ashmore Group, Diageo, Tavistock Investments, Time Finance

TRADING ANNOUNCEMENTS

Derwent London, Howden Joinery Group, IMI, OSB Group , S4 Capital, Vistry Group , Watches of Switzerland Group

UK ECONOMIC ANNOUNCEMENTS

PMI Construction (09:30)

FINAL DIVIDEND PAYMENT DATE

Begbies Traynor Group, City of London Investment Group

FINAL EX-DIVIDEND DATE

Ashmore Group, Avingtrans, CVS Group, Galliford Try, Genus, Softcat, Springfield Properties