Catalonia referendum, H&M results
The FT's Aimee Keane highlights the key stories to watch for in the coming week, including the independence referendum in Catalonia, H&M's results and the start of Japan's new parliamentary session.
Filmed and produced by Jay Bungay.
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Welcome to The Week Ahead. Here are the stories we'll be watching in the next few days.
The government of the Catalonia region in Spain will attempt to vote on an independence referendum. We'll get another check on the retail sector when Hennes & Mauritz, the Swedish owner of fast fashion retailer H&M releases its third quarter results.
And Japan prepares for a new parliamentary session amid expectations Prime Minister Shinzo Abe will call for a snap general election.
We'll start with the independence referendum in Catalonia. The local government will attempt to hold a referendum on Sunday on the question of whether to become an independent state. Anticipation of the vote has fueled tensions between the local and central Spanish governments. The Spanish courts have ruled the vote illegal. And the central government has vowed to stop it from taking place.
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Last week, thousands of Catalan separatists stepped up protests against the Spanish state after national police raided Catalan government buildings and made a series of arrests of local officials. The FT's Michael Stothard has more from Madrid.
The Catalan governments say that the vote will go on regardless. And if the people vote yes, they will unilaterally declare independence within 48 hours. This is shaping up to be the most severe constitutional crisis in Spain since the attempted army coup in 1981.
Now, to the next round of results in the closely watched retail sector. Hennes & Mauritz, the parent company of fast fashion producer H&M, released its third quarter earnings on Thursday. And investors will be looking for signs the retailer can shake off a long period of sluggish sales growth. Shares in the company, which is the world's second largest fashion retailer, have risen by about 7% so far in September on analysts' expectations that an aggressive clear out of inventory from H&M can boost future earnings. The FT's Richard Milne has more on what investors will be watching for.
H&M has been squeezed on all sides in recent years. It's been hit by budget retailers who are undercutting it on price. It's also been hit by slightly more upmarket retailers like Zara, which are owned by Inditex, which has now become the world's largest fashion retailer ahead of the Swedish company.
And then the final challenge it's facing is that there are online only retailers, [INAUDIBLE] or Zalando in Europe, which are also taking a lot of its business. So what H&M needs to show is that it can stabilise its business, it can grow, and it can become more profitable. And I think that's what investors will be looking at in these quarterly results, if they get a sign of that.
And to Japan. On Thursday, the country's new parliamentary session is due to start. But it may be over in an instant, as Prime Minister Shinzo Abe is widely expected to dissolve the assembly and call a snap general election. This comes as the opposition Democratic Party, which has dealt with a series of scandals and party defections, risks a fracturing of the left-wing vote. Analysts predict that Mr. Abe's ruling Liberal Democratic Party may lose only 5 to 15 of its 288 seats, which would leave it with a clear majority.
Despite the splintering on the left, there is a wildcard in the political field. And that is a new party set up by Tokyo's popular governor, Yuriko Koike. But by going to the polls now, Mr. Abe can strike before her organisation goes nationwide.
The most likely date for the vote is October 22nd. The FT's Tokyo bureau chief Robin Harding has more on what voters in Japan can expect from Mr. Abe's campaign.
He's well-placed to win. But the big economic consequence will be in terms of fiscal policy. Japan is due to raise consumption tax from 8% to 10% in the autumn of 2019. Signs are Mr. Abe's manifesto will keep that pledge, but divert much of the money away from deficit reduction and towards nursery and university education.
And that's what the week ahead looks like from the FT in New York.
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