CPW.L Share News (CPW)

It is a big day for central banks on Thursday with the Bank of England and the European Central Bank both set to announce their interest rate decisions, though neither is expected to alter course ... yet.For the Bank of England's Monetary Policy Committee (MPC), the pressure to lift interest rates in order to combat the rise in inflation was relieved by March's surprise fall in the inflation rate to 4.0%. As Barclays Capital's Simon Hayes puts it: "At the time of the February Inflation Report financial markets were pricing in a 25 basis points [quarter of a percentage point] rise in Bank Rate this month and at least one further increase later in the year ... Now, however, the probability attached to a May hike is virtually zero and a 25 basis points hike is barely fully priced by year-end."Though Hayes is of the opinion that "the near term outlook for inflation has, if anything, worsened" he is not expecting any change in policy with the bank rate held at 0.5% and the stock of asset purchases unchanged at £200bn.As for the European Central Bank (ECB) many brokers seems to be playing a game of "spot the mention of the 'strong vigilance' code phrase" which will tip the wink that a quarter point hike is on its way, possibly as soon as next month.A June rise would be "about a month earlier than the consensus expects, but recent upside surprises on both growth and inflation argue for a quicker move," said Bank of America Merrill Lynch. Citigroup agrees that the ECB is likely to leave rates unchanged at 1.25% in May, "but recent comments by ECB officials suggest that they will hike interest rates further in order to prevent second-round effects from commodity price gains. It is a close call if the next move will be in June or July. We still have a preference for July, but it may well be that the ECB will use the "strong vigilance" phrase in May in order to signal that the next rate hike will take place in June."Completing the trio of "strong vigilance" spotters, RBS says its expects "ECB President Trichet to use the phrase 'strong vigilance' at Thursday's meeting to signal the Governing Council will raise rates at the June meeting, subject to the usual 'no pre-commitment' caveats""As we noted last month the ECB's language at April's meeting kept the door firmly open to further interest rate increases, potentially as early as June, given the use of 'monitor very closely' (which has been historically consistent with a rate hike potentially two months away)," RBS added.There is no shortage of activity on the corporate front, with the likes of Morrisons, Vedanta, AMEC, Diageo, Mondi, Petropavlovsk, Schroders, St. James's Place, Carphone Warehouse and Smith & Nephew among the big hitters updating the market. Part-nationalised lender Lloyds Banking will likely give more detail than it traditionally has done in its interim management statement, reckons Nomura Research, with the broker expecting the group to disclose key profit and loss line items and provide comments on the balance sheet."We estimate first quarter profit before tax of around £800m (before FV unwind & restructuring costs) and total net income of £5.7bn," Nomura says. "For 2011 as a whole, we are estimating 4% revenue fall, as a result of stable margins and balance sheet run down. We also estimate expenses decrease by 5% y-o-y [year-on-year] as a result of higher synergies, and have impairments down 32%. We expect the first quarter to reflect these trends," Nomura added.Credit Suisse is not expecting many surprises from Vedanta Resources' results, given the miner has already reported full year production numbers. "The only division with no pre-reporting is KCM copper; we expect this to be the key focus for investors given the division's ambitious growth and cost reduction plans," Credit Suisse says. The Swiss banking giant is forecasting group earnings before interest, tax, depreciation and amortisation (EBITDA) of $3,301m, which it says is 6% below consensus and up 44% year on year. It forecasts basic earnings per share (EPS) of $3.07, 10% below consensus of $3.40.Paper and packaging firm Mondi releases its first quarter trading update and RBS is expecting it to be a positive one. "We expect volume growth and price increases to offset input cost pressures (rising pulp, OCC and oil/energy related)," RBS says. Fiscal 2011 will be the "first full year for Mondi to benefit from optimising its newly expanded low-cost pulp and paper manufacturing capacity in emerging Europe, with its structurally superior demand growth for paper," the broker added.Supermarket group Morrison (Wm.) brings out a trading update covering the three months to the beginning of May. Nomura predicts like for like sales growth, excluding fuel and value added tax (VAT) of 1.3% from a year earlier. With fuel included, the broker is tipping growth will hit the 4% mark."With the Netto stores set to come through in Q2 and, we believe, no new store openings in Q1, we expect a new space impact on sales of less than +2%. This should build through not only in 2011 but also 2012 and 2013 to reach +5% (c.8% gross space)," the broker said."As management provided a much greater depth of strategy at the recent prelims and surprised positively with respect to its new space plans, we expect little new information on its strategic initiatives. Nonetheless, trade press continues to highlight the group's quiet progress, notably with trial convenience stores to be opened in the affluent northern towns of Ilkley and Wilmslow, and with a further site in Merseyside," Nomura added.Matrix Group is forecasting like for like sales growth of 1%, excluding petrol. "Recent warm weather and a plethora of bank holidays should also have been very beneficial to the top line, in our view," says Matrix's Tom Gadsby.May 5 will see the first results presentation of Olivier Bohuon, the new chief executive of hip-replacement outfit Smith & Nephew. "First quarter results at US orthopaedic companies have given first indications about marginally deteriorating market conditions (mainly in knees), but stabilised negative US pricing trends. In such an environment, we expect SN [Smith & Nephew] to gain share, particularly in US knees driven by its well proven Verilast bearing technology (oxinium on highly crosslinked poly)," says Credit Suisse. "Also, we see further growth contributors in trauma, arthroscopy and negative pressure wound therapy," it added. The Swiss bank is predicting underlying group sales will be 4% higher in the first quarter than a year earlier at $1,032m. It predicts adjusted EPS of 18 cents. Internet service provider Carphone Warehouse's trading update covers the final quarter of its financial year. RBS forecasts full year like for like sales growth of 1.0% for the core European business, which puts its half a percentage point behind consensus, and implies a 1.3% contraction in like for like sale in the fourth quarter."We lower our full year 2011 connections assumption by 150 basis points [1.5 percentage points] to -4%. A 4Q connections decline of 3.9% would mark the fifth consecutive quarterly fall," RBS notes.The company has guided to full year earnings before interest and tax (EBIT) of between £131m and £137m; RBS is forecasting £126.6m, reflecting the group's exposure to "cash-strapped UK and Spanish consumers".GMSJohnson Service GroupFINALSRugby Estates, Vedanta Resources, IMSSAer Lingus Group, Amec, Diageo, Lloyds Banking Group, Mondi, Morrison (Wm.), Petropavlovsk, Schroders, Schroders (Non-Voting), St James's PlaceAGMSAga Rangemaster Group, Amec, Avocet Mining, Biome Technologies, F&C Inv Trust, Fisher (James) & Sons, Futura Medical, GlaxoSmithKline, GVC Holdings, Johnson Service Group, JSC KazMunaiGaz Exploration GDR (Reg S), Lancashire Holdings, Mondi, Morgan Sindall Group, Norsk Hydro ASA, Novae Group, Oxford Biomedica, Reckitt Benckiser Group, Rexam, Rio Tinto, Robinson, Schroders, Schroders (Non-Voting), Standard Chartered, Stratex InternationalTRADING ANNOUNCEMENTSCarphone Warehouse Group, Flybe GroupFINAL DIVIDEND PAYMENT DATEBerendsen, British American Tobacco, FBD Holdings, First Quantum Minerals Ltd., Flying Brands Ltd. Units, Goals Soccer Centres, Logica, SEGRO, Spirent Communications, Stadium GroupQ1Komercni Banka GDR (Level 1), Smith & NephewUK ECONOMIC ANNOUNCEMENTSServices PMI - April (09:30)Bank of England rate decision (12:30)Bank of England asset purchase decision (12:30)INTERNATIONAL ECONOMIC ANNOUNCEMENTSECB interest rate announcement (EU) (12:45)Factory Orders (GER) (11:00)Productivity (US) (13:30)Unit labour costs (US) (13:30)---jh