Purchasing managers' indices provide focus in UK election week

Manufacturing survey data will start the week with purchasing managers' indices released in China and the eurozone on Monday. Midweek the focus will mostly be on the services sector with the ISM non-manufacturing survey released on Tuesday and services PMIs on Wednesday.

US jobs data, Chinese trade data and the aftermath of the UK's general election will be the main topics of market conversation on Friday. Finally inflation data will be published on Saturday.

The volume of Chinese data released this week means that we ought to have a much better idea of the strength of the country's economy as it grows at its slowest pace for six years and reliable data are scarce.

Broadly, manufacturing PMIs are expected to be stable. Out of the eurozone, France, Germany and China, only the last is expected not to confirm the initial flash reading.

China, however, is expected to see a slowdown in the rate of contraction in manufacturing with the HSBC PMI forecast to come in with a reading of 49.4 in April, higher than a flash reading of 49.2. A PMI reading of above 50 indicates expansion while below 50 indicates contraction.

On Tuesday, the ISM non-manufacturing survey is forecast to point to a slight slowdown in the rate of expansion. It is expected to show a result of 56.2, a slight slip from March's figure of 56.5. On Wednesday, services PMIs will be published for China, the eurozone and the UK as well.

In terms of data releases, Thursday will be pretty quiet with industrial and manufacturing production data published for France as well as initial joblessness claims for the US.

On Friday, markets are likely to be reacting to the aftermath of the UK's general election with most forecasts pointing to an inconclusive result which is likely to lead to protracted coalition negotiations. There have already been some indications of concern in financial markets over the uncertainty associated with the outcome and on Friday morning there could be more volatility as results come in.

Chinese trade data are expected to show a contraction in both exports and imports as the economy and demand for commodities in particular slows. The trade balance is expected to improve from $3.08bn in March to $34.25bn in April.

Non-farm payrolls were significantly below expectations in March. The average over the six months to February was 281,000 but the latest data only showed that the economy added 126,000 jobs. April's figure is not expected to show a full rebound as a contraction in the energy sector is a drag on employment growth. The market consensus is that 230,000 new jobs were created in April.

Finally, on Saturday Chinese inflation data are expected to show a slight increase in the rate of inflation. The consumer price index is expected to be 1.6 per cent higher than April last year. In March it was only 1.4 per cent higher.

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