Preview: Earnings Set to Dominate; M&A Continues

“M&A is going to continue, but the big driver is going to be earnings … it’s the heaviest week of earnings and that will dominate,” said Patrik Schowitz, European Equity Strategist at HSBC.

Forecasts for the first-quarter were quite pessimistic, but the results delivered so far have been reasonably solid, added Schowitz, which is helping to lift the equity markets.

Among the European companies reporting next week are: Italian car maker Fiat; Switzerland’s pharmaceutical giant Novartis and packaged food company Nestle; France’s Aviva, the world’s fifth largest insurance group; British energy giant BP and pharmaceutical company Glaxosmithkline; German pharma Merck and engineering conglomerate Siemens.

French citizens will find out which two presidential candidates they have chosen to go through to the second round of voting, with preliminary results expected on Sunday night at 6 pm central European time.

According to polling station data, centre right candidate Nicolas Sarkozy is the favorite with 27 to 30% of the intended votes, centre left candidate Segolene Royal is second most popular with 22.5 to 26% of the intended votes, centrist François Bayrou has 17 to 20%, and far-right candidate Jean-Marie Le Pen has 13 to 16%.

The two candidates with the most votes will go through to second round of voting, scheduled for May 6th. If any of the candidates gets over 50% of the first round votes they can win in the presidency straight away, but this is highly likely. CNBC Europe's Geoff Cutmore will be hosting Squawk Box Europe live from Paris on Monday morning for the latest results and analysis.

On the M&A front, the future of takeover targets Alliance Boots and ABN Amro will be closely watched next week, with the ensuing bidding war for Alliance Boots set to continue.

A second private equity consortium came forward Friday with an improved bid for Alliance Boots, after it had already accepted a 10.6 billion pound ($21.3 billion) bid from a group compromising Boots’ executive deputy chairman and Kohlberg Kravis Roberts & Co.

The rival consortium includes private equity group Terra Firma Investments, medical charity the Wellcome Trust and banking group HBOS. The new offer trumps the KKR bid by 26 pence per share (52 cents).

The potential take-over of ABN Amro will gain new direction on Monday as Fortis, Banco Santander Central Hispano and the Royal Bank of Scotland take ABN’s invitation to meet and discuss their offer.

Any offer made by the consortium will be considered along side the existing bid from Barclays. Stocks in all of the banks involved could see dramatic changes if fresh news is delivered.