France votes, Unilever’s first-quarter report

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Hello, and welcome to the Week Ahead from the "Financial Times" in London. Here's what we'll be watching in the coming days. France goes to the polls for the first leg of voting in the presidential elections. Unilever releases its first quarterly revenue numbers since the aborted takeover bid from Kraft Heinz. There's new economic data out of the US. And there's the spring meetings of the IMF and the World Bank, which are taking place in Washington D.C.

First to France, where the opening round of voting in the presidential elections takes place on Sunday. And after a tumultuous campaign rife with political scandal, it's starting to look like a genuine four-horse race. The "FT's" poll tracker puts the leader of the far-right National Front party, Marine Le Pen, and the independent centrist, Emmanuel Macron, both on 24%. While Francois Fillon, the center-right Republican candidate, and the far-left leader, Jean-Luc Melenchon, are both on 19%.

The big story of the past 10 days has been the surge in support for Melenchon. And his rise, along with Le Pen's position in the polling, is giving financial markets the jitters. Here's our World News editor and a former Paris correspondent Ben Hall with more.

It's the most unpredictable election in France since the Second World War. What we thought was going to be a centrist versus far-right final round could end up being the nightmare scenario of-- as far as the markets are concerned-- a far-left candidate versus a far-right candidate. Investors are starting to fret about that because both far-left and far-right would be anti-euro, anti-EU, and pro spending lots of money that France doesn't have.

Next, to Unilever, the world's third biggest consumer goods group after Switzerland's Nestle and Procter and Gamble of the US. The company had expected Thursday's first quarter report to be the news highlight of its month. But these revenue numbers were upstaged a few days ago when the group made new commitments to improve its performance, following the aborted takeover bid from Kraft Heinz in February.

expectations are for underlying sales growth at Unilever to be around 2%, which would mark the third consecutive quarter of slowing growth. But the commitments on performance have dimmed the importance of the Q1 numbers, as our consumer industries editor, Scheherazade Daneshkhu explains.

So these first quarter numbers have really been overshadowed by the review that Unilever announced a few days ago in which it promised to boost profitability and to make more savings as well as to launch a $5 billion euro share buyback and to sell its margarines division. So the shares have shot up, actually, by 24% since the beginning of the year, mostly because of the aborted Kraft Heinz bid and these commitments to improve performance.

Unless the first quarter numbers are much worse than we expect, investors will very much remain focused on seeing that Unilever drives forward on the promises that it's made on profitability and the other measures I mentioned. And that will be the main driver of earnings and of share price this year.

Now, US investors will this week play a juggling act as earnings season vies for attention with updates on the health of the American economy. March marked the start of the key selling season for the housing market, and investors will be eyeing updates on housing starts and existing home sales. Our US reporter Mamta Badkar has more.

Economists expect that the housing market for new homes cooled in March. Data is expected to show that housing starts declined 2.2% in March from the previous month while building permits are expected to have increased modestly. However, new home sales account for a much smaller portion of the housing market than previously owned homes. And a separate report released on Friday is expected to show that existing home sales inched up by about 1.2% in March.

This week, economists will also be scrutinising US industrial production data, a measure of everything made by factories, mines, and utilities, where a 0.5% rise in March from the previous month is anticipated. While investors will be watching the Federal Reserve's Beige Book, which includes anecdotal evidence on the health of the US economy from 12 regional Fed districts.

And finally, to the big event this week in terms of global economics, when finance ministers and central bank governors gather in Washington D.C. for the spring meetings of the IMF and the World Bank. This follows the recent summit of G20 finance ministers in Baden-Baden in Germany. And many of the characters who attended that summit will be back in Washington. Here's our US economics editor Sam Fleming with more.

The US was not willing during the Baden-Baden meetings to sign up to some of the traditional language you'd expect from the communique after those meetings in favour of free trade. So there'll be a lot of interest, really, in the US position.

Steve Mnuchin, the US Treasury Secretary, being one of the key players to attend these spring meetings for the first time. What will the Trump administration's tone be in terms of international cooperation and in terms of free trade and the risks of protectionism? These are the key issues to watch.

And that's what the Week Ahead looks like from the "Financial Times" in London. See you again next time.