A Brief Look At The Week Ahead

The big event in the City this week will be the US Federal Reserve's latest decision on interest rates. Jitters over the prospect of inflation-driven increases have been causing ructions in global markets for more than a month now. The Fed is expected to raise rates by a quarter of a point this week, taking them to 5.25% and creating the biggest divergence from UK rates for over 20 years. What the market will want to know then is whether that will be the end of the increases. Sir Martin Sorrell's WPP, the world's second-largest advertising group, will give an update on trading at its AGM on Tuesday. WPP, which owns the Ogilvy & Mather, JWT and Grey agencies, is expected to unveil organic revenue growth ahead of its original 4% to 5% cent guidance for 2006. Analysts believe the World Cup effect could have pushed growth nearer to 6% cent. Increased political advertising for the US mid-term elections is also expected to provide a fillip in 2006. Sir Martin may also update investors on any further buying plans. Gallaher, the maker of Benson & Hedges and Silk Cut, provides a Q1 update on Tuesday. It is expected to deliver around 584m in pre-tax profits this year, compared with 570m last year, so the City will want to make sure it is still on course to hit this target. The group is using revenues from its mature European markets to fund expansion east into emerging markets. Diageo, the owner of Johnnie Walker and Guinness, is expected to confirm it is still on track to deliver a rise of at least 7% cent in operating profits for the year to the end of June. It has also flagged faster earnings growth in the second half. However, while its main brands are likely to have continued their strong growth in the US, costs are being cut in the slower European market. Management may also discuss whether it will continue its search for acquisitions. Bread, cakes and condiments will be on the menu Thursday as food producer RHM, the maker of Hovis, Mr Kipling and Sharwood's, unwraps its annual results. RHM's launch of a healthier range of breads and cakes is expected to drive sales higher. The group earlier this year suggested Mr Kipling cakes were starting to show signs of a turnaround after the launch of a low-fat range. Other companies in the limelight this week include Carpetright and Dobbies Garden Centres on Tuesday; Ashtead and Ultraframe on Wednesday and Xansa and Heavitree Brewery on Thursday. I guess traders will be cautious ahead of the Fed decision, but volatility will persist. Supermum is taking a break for a few weeks but will return with her Weekly Chart View later in the Summer. Good hunting! Greystone (Greystone is Alan English, City Editor at MoneyAM.)

Good morning traders!

In Asia, the Hang Seng closed the morning up 19.4 points at 15,828.21, while the Nikkei was recently down 125.52 points at 14,998.52.

New York's main oil contract, light sweet crude for delivery in August, was down 9 cents at $70.78 per barrel from $70.87 in late trading in the US Friday.

Eraly broker notes:

GROUP 4 SECURICOR UPGRADED TO 'BUY' VS 'HOLD' AT DEUTSCHE BANK
IMPERIAL TOBACCO ADDED TO JP MORGAN EUROPEAN ANALYST FOCUS LIST
DELHAIZE UPGRADED TO 'BUY' VS 'NEUTRAL' AT MERRILL LYNCH
QUINTAIN ESTATES UPGRADED TO 'BUY' AT MERRILL LYNCH

Happy trading!

G.

Midday Market Summary

HI Greystone, Nice charts and info,just bookmarked you, where is every one?

Like the markets .... fast asleep

End-of-day Market Summary