Rate Decisions, U.S. ISM Indexes, Vivendi: European Week Ahead

By Daniela Silberstein

Aug. 29 (Bloomberg) -- Interest rate decisions from the European Central Bank and the Bank of England and reports on U.S. manufacturing and services may move stock markets next week.

Earnings from Vivendi SA, France's largest entertainment company, will also be watched. Spanish builder Grupo Ferrovial SA is also scheduled to report results.

The Dow Jones Stoxx 600 Index advanced 1.6 percent to 288.31 this week as of 1:28 p.m. in London. The Stoxx 50 increased 1.8 percent, while the Euro Stoxx 50, a benchmark for nations sharing the euro, added 1.5 percent.

``Everything will revolve around the wording at the ECB's press conference,'' Michael Schubert, an economist at Commerzbank AG in Frankfurt, wrote in a report to investors today. ``The ECB should continue to keep all option open although it will reduce its growth projections significantly.''

The European Central Bank will hold its meeting Sep. 4 in Frankfurt. The governing council will probably keep its key rate at a seven-year high of 4.25 percent to fight inflation, according to the median estimate of 28 economists surveyed by Bloomberg.

The Bank of England on the same day may leave its main rate at 5 percent for a fifth month, according to the median of 50 economists' estimates.

European producer price inflation may have accelerated to 1.2 percent in July, according to Bloomberg estimates. The European Union statistics office in Luxembourg will publish the report Sep. 2.

GDP

The European Commission is due to report gross domestic product figures for the euro zone Sep. 3. Economic growth probably contracted in the second quarter as faltering sales undermined investment by companies and soaring costs hit consumer spending.

The Institute of Supply Management's index of manufacturing, due Sep. 2, may show manufacturing in the U.S. shrank to 49.5 in August from 50 a month earlier, according to Bloomberg estimates. Fifty is the dividing line between contraction and expansion.

The ISM's index of non-manufacturing businesses probably fell to 49.5 from 49.5 the prior month, Bloomberg data shows. Service industries make up almost 90 percent of the U.S. economy. The report is due Sep. 4.

Vivendi reports results Sep. 1. The media company may say second-quarter profit dropped 3.6 percent to 728 million euros ($1.08 billion), according to the median estimate of seven analysts surveyed by Bloomberg, as expenses related to the acquisition of Neuf Cegetel SA more than wiped out higher earnings at pay-TV operator Canal Plus.

`Solid if Unspectacular'

``We expect Vivendi's first-half 2008 results to be solid if unspectacular,'' Paul Reynolds, an analyst at Deutsche Bank AG in London, wrote in a preview released Aug. 21. ``We expect some guidance on Neuf Cegetel's contribution for full-year 2008 but more importantly, for full-year 2009.''

Grupo Ferrovial, the Spanish builder that spent $20 billion buying BAA Plc, may say on the same day first-half profit slumped after a disposal boosted earnings a year earlier, a survey of analysts by Bloomberg showed.

Net income probably dropped to 12.7 million euros from 756 million euros a year earlier, according to the median of five estimates.

To contact the reporter on this story: Daniela Silberstein in Zurich at dsilberstei2@bloomberg.net.