Greece appears destined to return to the polls in June and Ireland is the next country which has a chance to throw a spanner in the European works when it holds a referendum on the fiscal compact in two weeks time (31 May). Markets are starting to price in the prospect of a Greek exit from the euro, disorderly or otherwise. Even so, events of the last two years suggest Germany will blink at the last minute and give Athens more breathing room. Whether this happens again remains to be seen, but a dash for safety is underway. UK, US and German 10-year bond yields, in particular, continue to drop and government debt valuations continue to rise. Even as geopolitics and macroeconomics dominate, investors need to keep an eye on the picture from the bottom up. A slew of corporate results over the coming week will provide valuable colour. Three themes are emerging. First, sterling’s strength (or the euros weakness) is starting to make a nuisance of itself so far as exporters are concerned. Second, Europes economic woes are becoming more apparent. And finally, earnings upgrades are becoming harder to come by. With growth seemingly at a premium, any company capable of advancing its earnings on a secular basis in an organic way is likely to see its shares bid higher. Equally, those paying a fat yield could also grow in popularity if weak earnings momentum erodes the prospects of capital gains.

One result of the ongoing travails of Europe`s southern periphery is the emergence of the pound as a haven currency. Unfortunately, sterling`s rise is starting to make life a bit trickier for Britain`s exporters (more)

One result of the ongoing travails of Europe's southern periphery is the emergence of the pound as a haven currency. Unfortunately, sterling's rise is starting to make life a bit trickier for Britain's exporters.

The pound has soared to near 20-month highs of €1.2549 and analysts have begun to adjust their numbers accordingly.

FTSE 100 firm software firm Sage (9 May) and FTSE 250 engineer Morgan Crucible (8 May) have both flagged the negative impact upon stated numbers of the pound's strength.

A rise in the local currency can render exports less competitive or mean sales generated overseas are worth less once translated back to pounds.

Companies to watch in the coming week which may offer further commentary include electronic components turnaround play e2v (21 May) and luxury goods play Burberry (23 May).

Both would doubtless be happier to see the pound retreat from elevated levels, even though they are likely to report good numbers.

For the 12 months to March, e2v is expected to report a 16 increase in earnings per share to 13.03p and hike its total dividend from 3.6p to 4p. A further 6 in profit is the consensus forecast for fiscal 2013.

The market is looking for full-year sales of £1.9 billion at Burberry, against £1.5 billion a year ago, and a 24 rise in earnings per share to 61.9p.

Consensus for fiscal 2013 is for an additional 17 rise in earnings.

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Germany`s first-quarter GDP advance of 0.5 helped Europe avoid a technical recession but evidence of the continent`s loss of confidence has continued to accumulate (more)

Germany's first-quarter GDP advance of 0.5 helped Europe avoid a technical recession but evidence of the continent's loss of confidence has continued to accumulate.

Overall, European GDP was flat between January and March when compared to the October-to-December period.

But companies have already started to notice signs of a slowdown. Sage, Morgan Crucible and Diploma are just three UK firms to have signalled conditions have become less predictable across the channel.

This is hardly a surprise given moves toward austerity and the chaos which is afflicting Greece, Spain, Italy and Portugal in particular.

Europe generates roughly a fifth of the FTSE 100's earnings so the EU could become a considerable drag on UK plc’s earnings power in 2012 and beyond.

Burberry and SABMiller's results next week (23 May and 24 May) will be of interest as both have substantial emerging market exposure, the former particularly in Asia and the latter in Latin America.

Their numbers may well focus investors' minds on the possible of emerging market exposure relative to a hefty presence in Europe.

SABMiller, the owner of the Grolsch, Peroni and Miller Genuine Draft labels, is expected to increase pre-tax income by 11.5 to $4.5 billion (£2.8 billion).

For the coming year the market is looking for an additional 17 increment to $5.3 billion.

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In a low-growth world companies whose competitive advantages allow them to advance their earnings irrespective of surrounding events will be highly prized (more)

In a low-growth world companies whose competitive advantages allow them to advance their earnings irrespective of surrounding events will be highly prized.

These companies may have strong brands, a technological edge, a big market share, a regulatory driver to their business or a large installed base of kit to milk for service and maintenance revenues.

Alternatively, they may have a business model which is allowing them to revolutionise an industry and take share away from less well prepared incumbents.

Online fashion retailer ASOS is one company which appears to be demolishing its rivals' models by imposing its own. Final results on Thursday (24 May) are forecast to show a 36 leap in earnings per share to 37p.

Increases of 36 and 35 are anticipated for the next two years, to 50.2p and 67.8p respectively.

There are also suggestions ASOS may pay a maiden dividend for the March 2013 financial year.

Ryanairs aggressive marketing and innovative pricing continue to shake up the airline industry.

It will therefore be interesting to see if maverick chief executive officer Michael O'Leary can shake off the industry-wide blues which have forced disappointing statements out of peers easyJet, International Consolidated Airlines (the owner of British Airways) and also Singapore Airlines.

Ryanair has already guided to a 5 drop in 2011-12 winter traffic as it mothballed planes owing to escalating fuel costs. March's numbers revealed a 4 year-on-year drop in passengers.

For the year to March 2012, the airline is expected to report a pre-tax profit figure of €555 million, for a 22 rise in earnings per share.

The forward-looking market will be more interested in any guidance for the financial year that ends March 2013.

Here, consensus is anticipating pre-tax income of €586 million, a 5 rise.
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