UK election and US jobs report to dominate a packed week

Investors have a packed calendar, with the UK election sharing a week with the latest reading on the US labour market and the latest negotiations between Greece and its creditors.

Here's what to expect over the coming days.

UK Election

The UK faces one of its most unpredictable general elections with voters heading to the polls on May 7. Recent surveys suggest a hung parliament, forcing either the Labour or Conservative party into a coalition government. Sterling has come under pressure in the lead up to the election, and implied volatility in the pound-dollar currency pair - a measure of expected volatility in the future - has climbed.

US Jobs Report

Jobs growth in the world's largest economy is thought to have bounced back after a disappointing report in March showed the slowest monthly gain in more than a year. Economists expect the closely scrutinised non-farm payrolls report will show a 225,000 increase in jobs from a month earlier, with the unemployment rate projected to fall from 5.5 to 5.4 per cent.

Greek Payment

Despite a sharp drop in Greek bond yields, investors will be watching for any news on negotiations between Athens and its international creditors over the weekend. The country gathered enough money to pay obligations due to pensioners and people familiar with the matter have told the FT that Athens should be able to make a €200m interest payment to the International Monetary Fund due on May 6.

Earnings

Earnings season in the US roars on, with more than 80 companies in the S&P 500 reporting in the coming days. The list includes Loews Corp, Walt Disney, Mylan, Kellogg, Electronic Arts, Fossil, Chesapeake Energy, Motorola Solutions, Twenty-First Century Fox, Whole Foods Market, Priceline and Monster Beverage.

The Week in Four Charts

Even Germany's safe-haven government bond market can suffer a sell-off. That was the surprise for investors this week, after prices of both short- and long-dated German tenors slid following a lacklustre auction of new government debt. The yield on the 10-year note jumped roughly 20 basis points to trade at 0.37 per cent - earlier in the month the yield had fallen as low as 0.07 per cent.

Greek bond yields tumbled over the course of the week after Athens reshuffled its team negotiating with international creditors on a list of economic reforms to unlock bailout funding. While a deal remains elusive, the yield on Greece's 10-year note declined to 10.23 per cent, roughly 300 basis points below a high reached earlier this month.

Apple once again eclipsed consensus expectations for revenues, earnings and iPhone sales with its results for the second quarter, as it increased its shareholder return programme to $200bn, briefly sending its stock to a record.

Results from the wider tech sector did not prove as lively. Twitter shares tumbled more than 25 per cent over a two-day period after the messaging company missed revenue expectations, prompting downgrades from Barclays and Janney Montgomery Scott. Yelp and LinkedIn also suffered stock price drops following quarterly results.

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Twitter: @ericgplatt

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