Europe’s finance ministers meet

Eurozone finance ministers will gather in Brussels on Monday in unusual circumstances. Jeroen Dijsselbloem, above, who has chaired such eurogroup meetings since January 2013, has just seen his party crushed at the ballot box in the March 15 Dutch elections.

Mr Dijsselbloem’s eurogroup presidency hinges on his role as the Netherlands’ finance minister. Coalition talks in the Netherlands mean that he could still be in office for months, and no discussion about his eurogroup position or a replacement will take place on Monday.

But the election outcome means that euro area governments are now confronted with a problem they did not want. In all likelihood, they will need to find a new eurogroup president in the next few months, despite Mr Dijsselbloem’s popularity among his peers.

The main item on ministers’ agenda on Monday will be Greece, and the efforts to reach a deal with the International Monetary Fund on the next stages of the country’s bailout programme.

EU and IMF officials have been negotiating intensely in recent days in a bid to lock down a deal on tax, pension and labour market reforms that Athens should implement once its aid programme ends in 2018.

Commenting on the talks last Thursday, an EU official said: “Progress has been made on tax but there are still quite some open issues left in terms of pension issues, [while] on the labour market there has been no perceptible improvement.”

No breakthrough is expected at Monday’s meeting, with ministers instead braced for further talks after the IMF’s spring meeting in late April.

Background briefing

Eurogroup hails progress with IMF on Greek debt deal


UK inflation figures released

© Bloomberg

For the first time in more than three years, figures to be published Tuesday are expected to show that consumer price inflation in the UK hit, and possibly exceeded, the Bank of England’s 2 per cent target in February.

Fuel and food prices are expected to have contributed to this, as price falls seen a year ago are not repeated. Though there was a lot of discussion of vegetable prices during the “courgette crisis” at the start of the previous month, this may not have much noticeable effect in Tuesday’s figures, as the affected vegetables comprise only a small share of total spending.

“I think it’s been overcooked,” said Alan Clarke of Scotiabank. “I don’t think it will be causing us to have an even bigger increase in inflation.”

Imported products will also contribute to inflation as the depreciation of sterling continues to feed through to consumer prices.

This week will also be the first time the Office for National Statistic publishes its much-vaunted new “headline” measure of inflation. Known as CPIH, this price index incorporates a measure of housing costs for owner-occupiers, which are excluded from the CPI. For the past two years, CPIH inflation has exceeded CPI inflation. In January, the gap was 0.2 percentage points, but between spring 2008 and summer 2014, the reverse was true.

Though the ONS is keen to badge CPIH as its “headline” measure, it is unlikely to gain much traction while public policy — including tax thresholds, benefit rates and the Bank of England’s inflation target — continues to use the CPI.

Background briefing

Inflation rises faster than expected in December

FedEx publishes Q3 results

FedEx will report earnings, which should shed light on its integration with TNT, the Dutch package carrier that it purchased last year.

Analysts expect FedEx, which is one of the largest carriers in the US, will report revenues of $15bn for its fiscal third quarter, which ended in February. That would represent sales growth of 18.5 per cent, and most of this growth is due to the TNT acquisition, which closed last May. Revenues from the TNT Express segment accounted for $1.9bn last quarter, or 13 per cent of overall sales.

Profits are expect to rise to $678.3m during the third quarter, according to estimates from S&P Capital IQ, up 34 per cent from the same period last year.

But JPMorgan analysts recently noted that one of the risks facing FedEx is that consumers in the US are increasingly becoming accustomed to free two-day shipping from Amazon, making shoppers less willing to pay for expedited shipping when buying from non-Amazon retailers. As a result, FedEx has been focused on growing its shipments from small and medium-sized businesses.

The company said it is targeting earnings per share between $10.95 and $11.45 during the current fiscal year, excluding pension accounting adjustments.

Background briefing

FedEx defies sluggish trade growth but faces big pension writedown


Kingfisher announces preliminary results

Investors will be looking for signs of progress with Kingfisher’s turnround plan when the DIY retailer announces full-year results on Wednesday.

The FTSE 100 group, best known as the owner of the Screwfix and B&Q chains in the UK, also owns the Castorama and Brico Dépôt stores in France, where a slowdown in consumer confidence has dented sales.

Last year Véronique Laury, chief executive, announced five-year targets that involve spending £800m to eventually lift profits by £500m a year.

She plans to standardise much of the company’s products in all the countries it operates, enabling buying managers to extract discounts by purchasing at scale.

The chain faces greater competition in the UK after the Bunnings Group took over its main rival Homebase. The Australian DIY chain recently rebranded its first pilot store, which is undercutting B&Q by 7 per cent on average, analysts say.

Still, commentators expect sales to grow 7.7 per cent over the full year, according to Capital IQ data, helped by the weakness of sterling, which increases the reported value of European sales. Pre-tax earnings are expected to have risen 8 per cent.

Background briefing

Kingfisher hit by sharper sales fall in French DIY business


F1 season gears up

© Getty

The first Formula One Grand Prix under new ownership takes place today, as the global racing series is driven into a new era after four decades under the direction of former chief executive Bernie Ecclestone.

The first race of the 2017 season will take place in Melbourne, Australia, under the watchful eye of Chase Carey, the chairman and chief executive of Liberty Media, the US group that acquired F1’s parent company in a $8bn deal completed earlier this year.

Mr Carey, a former executive vice-chairman of Rupert Murdoch’s 21st Century Fox, is charged with reinventing a sport that has been run as a personal fiefdom of Mr Ecclestone for 40 years. The British billionaire has been moved to an honorary role as an adviser to F1’s new owners.

Mr Carey has begun to hire a new management team, led by Sean Bratches, a former ESPN executive, to look after commercial operations, and Ross Brawn, a former F1 team manager, to manage the sporting side.

The new owners have resisted the urge to make major changes before the start of the F1 season, as they work to unravel Mr Ecclestone’s deals with teams, broadcasters and race circuits around the world.

However, Liberty Media has outlined a long-term strategy to derive more value from the sport. This includes creating digital screening deals, expanding into the US, and ancillary events around every Grand Prix to make each race the equivalent of a “Super Bowl”.

Background briefing

Liberty Media plans Formula One revamp

German regional election

Voters in the German region of Saarland go to the polls today in an election that will be widely watched for clues about national political trends in advance of the September parliamentary vote, where Angela Merkel is running for a fourth term.

The chancellor’s Christian Democratic Union, which governs Saarland in coalition with the Social Democrats, had generally been forecast to win by a clear margin in Saarland and retain power. But the dramatic national resurgence of the SPD, since January, when Martin Schulz took over as leader, has left the local race wide open.

If the CDU hangs on to office, it will boost the party’s belief that it can contain the Schulz effect and so retain control of the national government in Berlin as well. But if the SPD manages to topple the CDU and lead the Saarland government — perhaps in a coalition with the Green and Left parties — the result could give Mr Schulz new momentum.

Observers are also focused on the rightwing Alternative for Germany, which faces its first electoral test since a string of successes in regional elections last year. The AfD has seen its support fade in recent national opinion polls as concerns about Germany’s refugee inflows have waned. The party has also been hurt by damaging internal power struggles. The Saarland AfD has a particular problem: the national party tried to expel the regional branch last year amid allegations of contact with far-right radicals. The Saarland AfD appealed against its expulsion to an arbitration court and won, but the episode may have hurt its chances.

Background briefing

Merkel challenger Schulz gains ground in German poll

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