Wednesday preview: Decision day in Germany

Economists have been mystified why the UK labour market has been holding up reasonably well despite the economy shifting back into reserve, and Wednesday might see a further bout of head-scratching as unemployment figures are released at 9:30.Expectations are that the unemployment rate on the International Labour Organisation (ILO) basis in July held steady at 8.0%, the same level as in June.The claimant count unemployment rate is seen staying at 4.9%, with little or no change expected in the number of jobless claims."The short-term outlook for labour markets in the UK remains somewhat muddied by the temporary boost from the Olympics. In July, the claimant count measure of unemployment fell by almost six thousand, and while about three thousand of this was associated with London (and therefore potentially Olympic related issues) the rest of the UK also recorded a fall in the claimant count. The August employment PMI [Purchasing Managers' Index] weakened somewhat from July, although it is still well above levels recorded in November of 2011," Credit Suisse observed."In the medium term, some weakness in unemployment seems probable; in particular, some of the recent upside has been caused by the Olympics. August may be too early to see this in the claimant count, but we expect some modest upward movement in those claiming unemployment benefits," the Swiss bank added.Looking across the water, the Dutch go to the polls while the German constitutional court will announce its keenly-awaited decision on the constitutionality of the European Stability Mechanism (ESM) treaty. "We believe it is highly unlikely that it will rule against the ESM treaty, but more strings are likely to be attached to make sure the parliament has a say on future aid ... The court decision will pave the way for the ESM to become operational in October," analysts at Credit Suisse wrote. On a big day for the Eurozone, the European Commission will make its pitch on the proposed banking union and the creation of a single euro-area bank supervisor. Stateside, the US Federal Reserve's policy-making committee will start its two-day monthly meeting.On the corporate front, the British summer has not been entirely conducive to pottering about in the garden, which may have had an effect on the performance of resurgent DIY retailer, Kingfisher.Sales data for the first 23 weeks of the period (to 7th July) were released with the pre-close trading update on 19th July, so the focus of investor attention will be on operating margins, outlook comments and any update on strategy, notes Charles Stanley's Sam Hart.For the record, Hart forecasts half-year revenue of £5,475m, earnings before interest, tax and amortisation (EBITA) of £430m and profit before tax of £395m. The interim dividend is tipped to rise to 3.08p from 2.47p last year."Whilst some of the softness in trading can probably be attributed to the re-escalation of the Euro-zone sovereign debt crisis, we attribute most of the weakness to poor weather. We would expect sales and gross margin trends to improve as weather patterns normalise. Longer term prospects remain favourable, given significant self-help opportunities," Hart adjudges.Credit Suisse is a fan of the stock, having recently initiated coverage with an "outperform" rating and a 12-month target price of 300p. It believe the risk to Kingfisher's French business is overstated."In France we argue that boosting house building and renovation are key objectives of the new Administration and there should be greater clarity over new and existing measures in the months ahead. In the UK, there are already a number of Government initiatives to boost liquidity in the housing market, and accelerate new homebuilding and refurbishment. On soft comps 2013 could finally see a recovery in UK DIY," Credit Suisse speculates.The Swiss outfit does concede, however, that the interim results could disappoint, with the update likely to represent the "first reversal after 5 years of strong growth," due to "appalling weather, adverse FX [foreign exchange], some disappointing execution and one-offs at Hornbach."It forecasts clean profit before tax of £380m. Returning to the theme of house building, Barratt Developments' full-year results should be strong, according to Panmure Gordon.The market has pencilled in £2.32bn for revenue and £108.84m for profit before tax. Earnings per share (EPS) are expected to be around 8.27p, and the full-year divi 0.55p."We expect the group to report a 14.1% increase in volume completions in the year to June (to 12,637 units). Average selling prices are likely to have increased by 1.3% to £180,584 on mix, whilst net margins are likely to have increased by 160bps [basis points] to 8.2%," predicts Panmure Gordon, which believes it is too soon for the house builder to return to the dividend standard."House builders reporting to date, industry data and our own recent site visits lead us to believe that the environment for new build house builders remains broadly stable and we expect that the group will report that whilst trading since June has slowed due to seasonal trends, sales rates have been broadly stable/slightly ahead over the period. We expect this to continue for much of the year and our forecasts conservatively assume just a 1.3% increase in volumes for financial year 2013." Panmure Gordon said.Peel Hunt advises us that we should "expect a lot of excitement about the new government housing policy," though the broker does not sound as if such jubilation is justified."Barratt is the most politically motivated of the larger house builders and will trumpet the recent government moves to use housing to trigger economic growth as a really positive development. In reality, it is a series of hollow moves," Peel Hunt ventures.INTERIMSAlkane Energy, Alliance Pharma, Gulf Keystone Petroleum Ltd. (DI), InterQuest Group, Kingfisher, Modern Water, Netplay TV, OJSC Cherkizovo Group GDR (Reg S), Tikit GroupINTERIM DIVIDEND PAYMENT DATEInformaINTERIM EX-DIVIDEND DATE32Red, 888 Holdings, Abbey Protection, Admiral Group, Antofagasta, Avesco Group, Belvoir Lettings, Berendsen, Bwin.party Digital Entertainment, Capita, Chesnara, Clarke (T.), Clarkson, Concurrent Technologies, Cookson Group, Densitron Technologies, Fyffes, H&T Group, International Public Partnerships Ltd., Ladbrokes, Lavendon Group, Lupus Capital, Macfarlane Group, New Europe Property Investments, Pennant International Group, Rathbone Brothers, Rentokil Initial, Restaurant Group, Savills, Stadium Group, Tamar European Industrial Fund Ltd., Temple Bar Inv Trust, Tex Holdings, Treatt, UTV Media, ZotefoamsQUARTERLY PAYMENT DATEM Winkworth, UnileverQUARTERLY EX-DIVIDEND DATEAlpha Pyrenees Trust Ltd., Land Securities GroupINTERNATIONAL ECONOMIC ANNOUNCEMENTSConsumer Price Index (GER) (07:00)Crude Oil Inventories (US) (15:30)Import and Export Price Indexes (US) (13:30)Industrial Production (EU) (10:00)MBA Mortgage Applications (US) (12:00)Wholesales Inventories (US) (15:00)FINALSBarratt Developments, ThorntonsSPECIAL EX-DIVIDEND PAYMENT DATEAdmiral Group, Hargreaves LansdownAGMSEnteq Upstream, ITM Power, Liontrust Asset Management, Petro Matad Ltd., Stewart & WightUK ECONOMIC ANNOUNCEMENTSClaimant Count Rate (09:30)Unemployment Rate (09:30)FINAL DIVIDEND PAYMENT DATECrestonFINAL EX-DIVIDEND DATEAvarae Global Coins, Cash Converters International Ltd, Catalyst Media Group, Colefax Group, Dart Group, Darty, Goodwin Plc, Hargreaves Lansdown, Impala Platinum Holdings Ltd., Medusa Mining Ltd. (DI), Stewart & Wight, Sweett Group, Vianet GroupJH