Wednesday preview: Brexit amendment votes, FOMC decision in focus
By Alexander Bueso
Date: Tuesday 29 Jan 2019
(Sharecast News) - All eyes on Tuesday will be on the result of the various votes in the British Parliament on MPs' proposed amendments to the Prime Minister's Plan B on the UK's Withdrawal.
Ahead of the voting, Samuel Tombs, Pantheon Macroeconomics's chief UK economist, believed the more likely scenario was that amendments from Cooper, Grieve, Benn or Reeves would come out on top (albeit by a very slim margin), further cutting the chances of a 'no-deal' Brexit and in turn helping to extend Sterling's rally.
Against that backdrop, investors would also be digesting US technology giant Apple's latest corporate results, even as they geared-up for the US Federal Reserve's policy announcement later in the evening.
To take note of, some analysts see a risk that the Fed might deliver guidance that is inadvertently too hawkish.
In between, investors will likely be well-advised to keep an eye out for any US-China trade deal-related news.
As an aside, UK consumer credit and mortgage lending data covering the month of December are also due out.
Across the Channel, markets will be monitoring the latest CPI data in Germany, which may weigh on the euro.
Stateside, in the run-up to Friday's monthly US jobs report, investors will be waiting on consultancy ADP's monthly report on private sector payrolls.
Also due out just after US Fed chair Jerome Powell finishes his post-meeting press conference are quarterly results from Microsoft.
On the corporate side of things, Wizz Air is among the companies that are set to update financial markets.
For the Eastern Europe-focused air carrier's third quarter sales, Numis's Kathryn Leonard is anticipating a 22% jump in revenues to €516.0m, helped by a 14.9% rise in available seat kilometres (ASK).
Implicitly, that pointed to RASK growth of about 7% for the back half of 2019 (Numis: 6.5%) and of about 3.5% for fiscal year 2019 (Numis: 2.9%).
Similarly, Leonard had penciled-in a 0.3% rise in cost per average seat kilometre over fiscal year 2019, versus the 1.0% decline anticipated by Wizz management.
However, the firm's hedging policy was expected to be supportive of the company's share price.
"WIZZ last reported that it was 53% hedged for FY19 and 35% hedged for FY20, where our forecasts currently assume a spot fuel price of $724/mt, significantly above the current spot price (c.$600/mt)," she said.
"We expect this to be supportive to earnings estimates."
Wednesday January 30
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