Thursday preview: Lloyds results, ECB policy announcement due

(Sharecast News) - Thursday will bring third-quarter results from Lloyds Banking Group and oil giant Shell, as well as the latest policy announcement from the European Central Bank.

Investors will also watch out for a Q3 production report from Glencore, trading updates from Haleon and IMI, and a Q3 new business announcement from St James's Place.

Across the pond, quarterly earnings from Amazon and Intel will be in the spotlight.

As far as the ECB is concerned, the market is expecting interest rates to remain unchanged at 2.50%.

Danske Bank said that while inflation surprised to the upside in September, rising to 3.7% year-over-year, the spillovers from energy costs to underlying inflation remain very muted, and firms' selling price expectations in services and retail even declined.

"We thus believe that the ECB is not in a hurry to hike policy rates as early as October and prefers to wait until December to deliver the next hike, when it will have more data and new projection," it said. It expects the central bank to leave rates at 2.75% in 2027.

"Additional tightening beyond December will be particularly influenced by growth developments in Q1," Danske said. "Higher energy costs, the lagged effects of rate hikes, and a tightening fiscal stance are set to weigh on growth, which should keep the ECB from hiking further in our baseline.

"However, upside risks to inflation from energy costs and low gas storage levels persist, which could warrant additional hiking. Hence, we see the risks to our call as tilted to the upside, as a fourth hike to 3.00% seems more likely than staying at 2.50%. But even in that upside risk scenario, we expect the ECB to hike less than the 75bp worth of tightening priced by markets."

On the UK macroeconomic calendar, mortgage approvals and consumer credit data for September will be out.