European shares are expected to stay around near five year highs next week with the take-over boom continuing to support despite prospective jitters from a European Central Bank rate decision and US non-farm payrolls.
Equities took a knock earlier this week after the Federal Reserve raised rates to 4.75 percent, the highest since April 2001, and failed to dampen expectations of further hikes after Ben Bernanke's first monetary policy meeting in charge.
However, global indexes quickly recovered from the 15th straight increase with the raft of take-over news in Europe and bullish corporate profits outweighing worries about rising borrowing costs down the line. Several bid stories remain on the boil with sources close to the matter saying the terms of a merger between France's Alcatel and smaller US rival Lucent Technologies could be announced next week.
UK broadcaster ITV said on Friday it had rejected a revised take-over proposal from a private equity consortium and the bidders look unlikely to return next week but developments are expected in Grupo Ferrovial's bid for BAA.
The chase for the London Stock Exchange is set to go quiet after Nasdaq withdrew its offer but the saga has a habit of springing surprises.
"The spate of M&A and new issues looks likely to continue, keeping trackers busy over the summer," said Edinburgh Tracker team members Gary Jones and David McCraw in their April preview for Aberdeen Asset Managers.
Fresh bid rumours are also expected to circle the market, especially as the European earnings diary slows to a trickle.
Analysts at Morgan Stanley said on Friday that the energy sector could be the next in line for big consolidation.
"The value is closer to home. We argue that there is a compelling industrial and value logic for large companies to focus their M&A efforts on other large companies within their own regions," they wrote in a note.
There are a smattering of company updates with a trading update from oil major BP on Wednesday, figures from Severn Trent on Monday and March traffic numbers from British Airways, SAS and EasyJet.
In Switzerland, watch maker Swatch is due to post full year results on Thursday and flavours and fragrances maker Givaudan is expected to release quarterly sales on Friday.
The consensus is that the ECB will next raise interest rates in May following strong economic data in Germany, faster eurozone money supply growth and hawkish talk from policymakers.
"Our view has been for sometime that they would raise rates to 3.25 percent by the end of this year and we felt that it was a mixture of the strengthening economic activity and a desire by the ECB to normalise interest rates," said Keith Wade, chief economist at Schroders.
"We have to admit though some of the data recently has probably been a bit stronger than even we'd expected. We think they'll carry on tightening in 2007 as well."
The Bank of England also decides on monetary policy the same day with economists unanimously forecasting no change, and many expecting rates to stay on hold for the rest of the year.
The monthly US jobs report on Friday is forecast to show non-farm payrolls rose 198,000 in March on the average economist estimate after last month's 243,000 increase.
Such a figure would fail to soothe fears of overheating pressures after Federal Reserve officials said this week further moves may be needed to keep inflation at bay.
Other key economic numbers due next week include eurozone February PPI inflation data on Tuesday and eurozone February retail sales on Wednesday.