European markets will be looking to shrug off yesterdays falls and push higher after some strong gains from the major US indices.

It is in fact looking fairly busy on the economic calendar and corporate calendar this morning which could bode well for the stronger performance from the FTSE 100 today.

Public sector spending figures will likely be then headline act of the day, another good number out of the UK could do their bit in lifting markets higher. The recent spate of strong numbers from the UK comes in stark contrast to those across the pond.

The US has had to endure some torrid figures that have shown that the US economic recovery may not be as advanced as had previously been thought. With this in mind we should also see the housing data from the US at 1330 also cause a bit of a stir.

The major equity markets seemed to be happily trading in a sideways range at the moment, with no signs of wanting to break free. The weaker economic performance by the US is being offset by a so-far strong earnings season.

If we are to get a break to the upside it could be that we would need some spectacular earnings figures, which so far do not seem to be there. However a move to the downside could well be sparked by some majorly disappointing US economic data or the re-emergence of the European sovereign debt problem. With recent downgrades to Ireland and Portugal this could be closer than we think.

The corporate calendar in the UK will start to get a little busier today with numbers from both Ryanair and William Hill. Ryanair has been in the headlines for the wrong reasons this week with chief executive Michael O’Leary forced to ‘unreservedly apologise’ and pay libel damages to Sir Stelios Haji-Ioannou, the founder of rival EasyJet.

The focus will shift to the Irish airline’s first quarter results on Tuesday. Volcanic ash disruption is forecast to have cost the company €50m, but Nomura expects Ryanair to reiterate guidance of 10% to 15% profit growth. The broker is predicting revenues of €862m and EBIT of €135m.

William Hill’s second quarter trading update is expected to reap the rewards of England’s poor performance in the World Cup after many patriotic but ill-advised punters bet on victories. That should help it build on its improved performance in the first quarter.

Ahead of the open we expect to the FTSE to open up 35 points at 5,183, the DAX up 36 at 6,043, and the CAC up 27 at 3,513.

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Article by James Hughes, Analyst, CMC Markets.

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