Greek strikes, US jobs data, FTSE index shake-up
The FT's Josh de la Mare looks at top stories making news this week, including the latest US economic data on jobs and spending, a national day of strikes in Greece, a visit by India's prime minister to Indonesia and a shake-up of the FTSE 100 index.
Written by Simon Greaves, Kerin Hope, Amy Kazmin, Dan Thomas and Mamta Badkar. Produced by Josh de la Mare.
Hello, and welcome to The Week Ahead from the Financial Times in London. Here are some of the big stories we'll be watching this week. The US brings out its latest jobs data, Greece goes on strike, India's President Modi takes a strategic trip to Indonesia, and online retailing is set to shake up the leading share index, the FTSE 100.
Despite a holiday-shortened trading week, the US economic calendar is busy with updates on growth, jobs, inflation, manufacturing, and consumer spending. As the Fed charts its course for monetary policy this year, the data should help give policymakers a better picture on its dual mandate of maintaining stable prices, as well as maximum employment. Mamta Badkar has this analysis.
The US jobs report out on Friday will provide a fresh snapshot of the labour market, and wages will once again grab the spotlight. Economists have argued that as unemployment continues to fall, wages should firm up as employers boost salaries to hire and retain employees. But recent data has showed that while the US unemployment rate has fallen to the lowest since Bill Clinton was president, the move has come as the labour force participation rate has declined.
Friday's report is expected to show wage growth heated up again in May while the unemployment rate remained unchanged at about 3.9%. The scrutiny comes as markets weigh up whether the Fed will lift interest rates a total of three or four times this year. Data at present suggests that there is further slack in the jobs market. Moreover, the Fed has for now indicated that it will not overreact to a run of higher inflation readings.
Greece's two biggest trade unions, ADEDY, which represents public sector workers, and the General Confederation of Labour, a nationwide umbrella union, will stage a 24-hour strike on Wednesday. Union officials said the joint walkout will be a protest against continued austerity, high unemployment, and overtaxation. ADEDY members are also protesting against the decision by the leftwing Syriza government to carry out evaluations of civil servants for the first time.
These surpass the current bailout agreement with the EU. The strike comes just a few days before parliament is due to legislate a final package of reforms agreed with Greece's creditors. The measures must be in place for the country to exit its current 86 billion euro programme in late August, bringing to an end eight years of bailout programmes supervised by the EU and the International Monetary Fund. Jean-Claude Juncker, European Commission president, spoke in Greece in late April about the bailout.
The leftwing Syriza government is increasingly anxious to get a deal on debt before the bailout ends and make a smooth return to borrowing on international capital markets. Investors are anticipating key changes to the UK retail sector line-up. When the composition of the FTSE index is announced on Wednesday after a quarterly review, companies included reflect Britain's changing High Street landscape and sustained pressure on it from online retail groups.
At the December review of the indices, the shopping shift was reflected by takeaway website Just Eat's move to the FTSE 100 index after its stock market value surpassed supermarket chain Sainsbury's. Daniel Thomas has more.
This week, we see the quarterly reshuffle of the FTSE 100, where the top 100 companies get chosen by their market cap. It's really interesting this time around, because we have Marks & Spencer versus Ocado, the old retailer versus the new retailer. Marks & Spencer, the stalwart of the High Street, which has had to restructure its business in order to regain ground and to restore its fortunes versus Ocado, this great, great stock at the moment, which has struck a fantastic deal with North America and really catapulted its share price as a result.
So this really represents the changing face of the British High Street - the old versus the new, the online versus the offline. And really, it'd be fascinating to see if Ocado really can take over Marks & Spencer this week.
And Indian Prime Minister Narendra Modi is trying to strengthen ties in southeast Asia as a counter to China, and to that end is set for a three-day visit to Indonesia to strengthen maritime co-operation with New Delhi's longtime friend. During his trip, Mr Modi and his Indonesian hosts are expected to sign an agreement that will give India access to port facilities on the Indonesian island of Sabang, a part of Aceh province.
Located around 175 kilometres southeast of Asia's own Andaman and Nicobar Island chain, Sabang sits along the northern end of the busy Malacca Strait, the critical shipping lane that links the Indian Ocean to the Pacific Ocean. India and Indonesia share both ancient cultural ties and a strong, modern friendship forged by their first post-independence leaders. And that's what the week ahead looks like from the Financial Times in London. Goodbye.