A Brief Look At The Week Ahead

The Bank of England is unlikely to provide any relief this week, with chances of an easing in base rates from 4.5% thought unlikely. Analysts think interest rates will stay on hold until February as the Bank takes into account the improving inflation outlook and stabilisation in the housing market. Retail takes centre stage this week with a raft of updates covering the Christmas trading period. Most analysts remain pessimistic about the sector's overall outlook for 2006 even though an absence of profit warnings and evidence of improved stock/margin management has boosted share prices. Feeding from market share data from TNS, many of the large food chains provide updates this week. Marks & Spencer (Tuesday) and Sainsbury (Thursday) are expected to produce solid Q3 trading results. However, while analysts expect Sainsbury's will post like-for-like sales improvements (ex-petrol) of 2% to 3.5% following a "pretty good Christmas", management's real test remains tough Q4 comparatives and its ability to transfer sales growth to the bottom line. In contrast, Wm Morrison's performance continues to confound analysts, as the company is still unable to provide credible market guidance following the acquisition of Safeway. On Wednesday, analysts predict seeing a like-for-like sales slide of at least 4% in Morrisons stores and a relatively poor sales result from the rebranded Safeway stores. With an "Optimisation Plan" expected to be unveiled at the group's interim results in March, commentary is likely to be brief. In the clothing sector, JP Morgan expects a relatively upbeat Q3 announcement from Burberry on Wednesday, forecasting a 2.5% increase in retail sales on a like-for-like basis. The outlook for GUS is more challenging, despite evidence of a strong finish to Christmas trading. While its data-collection agency, Experian, goes from strength to strength, budget retailer Argos and DIY specialist Homebase may have struggled. Analysts at Credit Suisse First Boston predict a 3% slide in Argos's Q3 like-for-like sales and a 6% slump in Homebase's sales in an update on Thursday. Little is expected from HMV on Thursday. Deutsche Bank is looking for a H1 pre-tax profit of 2.1m versus 10.5m last year. However, the Christmas trading period is the key, with more than 90% of profit coming in H2. Deutsche believes gross margin will slide by 0.2% at HMV UK and expand by 0.3% at its Waterstones book chain over Christmas. Among others in the spotlight this week will be Alcoa on Monday; Cobra Bio on Tuesday; BP on Wednesday and Photo-Me, Boots and Carphone Warehouse on Thursday. That should keep the New Year pot simmering..... Good hunting! Greystone (Greystone is Alan English, City Editor at MoneyAM.)

Good morning traders!

In Asia today, The Hang Seng broke through the 15,000 resistance level with a strong early performance. The index ended the morning up 216.22 points at 15,560.66. The Nikkei is closed for a public holiday.

Oil was little changed in Asian trade, with New York's main contract, light sweet crude for delivery in February, down 4 cents at $64.17 per barrel from $64.21 in New York last Friday.

Early broker notes:

EIRCOM DOWNGRADED TO 'UNDERPERFORM' FROM 'IN-LINE' BY GOLDMAN SACHS
HSBC UPGRADED TO 'HOLD' FROM 'SELL' BY CITIGROUP SMITH BARNEY

Other news:

Roche and GlaxoSmithKline announced that the US FDA has approved their osteoporosis treatment Boniva for post-menopausal women.

Happy trading!

G.

WKend press

AFX UK at a glance share guide

LONDON (AFX) - Leading shares are tipped to extend recent gains in opening deals, building on Friday's fresh 4-1/2 year closing highs on both sides of the Atlantic, with bid talk and continued strength in metal and oil prices helping to underpin gains, dealers said.
According to spread bettors CMC Markets, the FTSE 100 will open 14 points higher at around 5,746 having closed for the weekend 40.6 points firmer at 5,731.8.

MARKETS
Tokyo: Nikkei closed
Hang Seng 15,560.66 up 216.22

TODAY'S PRESS
* Warning of 150 bln stg black hole in pensions; actuaries say costs could be triple 50 bln stg forecast; call for more conservative accounting methods - FT
* DaimlerChrysler looks at selling off Smart car division if turnround fails - FT
* Knight Vinke Asset Management, the activist shareholder leading the battle against management at media giant VNU, seeking targets among Europe's 100 largest largest companies for its corporate activities in 2006 - FT
* Talks between PILKINGTON and Nippon Sheet Glass continuing, according to people involved in the discussions, contradicting reports that they had been terminated - FT
* Sir Brian Stewart intends to step down as chairman of STANDARD LIFE within 12 months of its forthcoming 5 bln stg flotation to focus on his chairmanship of SCOTTISH & NEWCASTLE - Times
* SABMILLER tipped to win auction for Indian brewery, Mohan Meakin - Times
* CATTLES accused by Norman Lamb, the Liberal Democrats' trade and industry spokesman, of exploiting poor with loan rates - Times
* CABLE & WIRELESS boss to finish job 'only half done'; Richard Lapthorne signs for three more years at struggling firm as he gets 1.25 mln stg windfall - Telegraph

PRESS COMMENT
FT
THE LEX COLUMN comments on Media companies (resilience of old media's earnings, coupled with any signs that fear is prompting real action, should trigger a stronger performance in 2006)
Independent
Small Talk: Stephen Foley comments on BLOCK SHIELD (St Jude Medical is using the Block Shield technology - combined with technology from IBM - in a wireless medical device, and IBM reckons that Block Shield's share of the orders will be worth 2 mln usd this year), DATACASH (a trading update will show that the company ended 2005 in line with the market's expectations and will make some positive noises about the prospects for new contracts and business relationships in the coming year), GLOBAL OCEANIC CARRIERS (on course for calmer waters)
Telegraph
AIM MARKET: Alternative energy companies are having a clean sweep (ITM POWER, CERES POWER, POLYFUEL, DOWDING & MILLS, SCREEN TECHNOLOGY, DATONG ELECTRONICS, BLOCK SHIELD

House insurance

Good morning all.

Good Morning all

End-of-day Market Summary