Investors will scour RBS's results on Thursday for signs of the cooling UK housing market's impact on the banking sector, and the market and consumers in general.
"The focus would be on the outlook and what the bank has to say about growth, rather than results," said Robert Parkes, UK equity strategist at HSBC Securities.
"The refinancing boom in the last few years helped banks generate top-line growth, but new mortgage approvals are slowing sharply and we expect refinancing to slow," he said.
RBS, Britain's second-largest bank, said in December it was confident of meeting expectations for 2004 and that it would enter 2005 in good shape.
Other key financial sector players reporting next week are Internet bank Egg and life insurer Legal and General.
The world's biggest confectioner Cadbury Schweppes, global mining giant Anglo American, and Britain's biggest brewer Scottish and Newcastle are among other heavyweights also expected to cheer the market.
While take-over activity has pushed the Midcap 250 index to record highs, analysts say they need more than gossip to have a similar effect in the FTSE 100 index.
"Mergers and acquisitions have been the key reason why the Mid-cap index has hit all-time high, but we need to see some of the rumours turning into a confirmed deal in the FTSE," Parkes said.
"If you believe in the no-smoke-without-fire philosophy, then you would expect an increase in merger and acquisitions pipeline," he said.
Darren Winder, UK equity strategist at investment bank UBS, said he expected strong results to help the FTSE 100 extend its gains next week.
"So far the broad profits picture looks pretty robust. This is likely to be another year of above-trend earnings," he said.
But Jim McCafferty, head of research at stockbrokers Seymour Pierce, said: "The rise happened very quickly and in a short space of time, and people need to settle back a bit before it goes upward again."
The market will also eye a batch of official releases, such as minutes from the last meetings of the Federal Open Market Committee and the UK's Monetary Policy Committee for clues on interest rates' path in both countries.
The FOMC raised interest rates by 25 basis points to 2.5 percent in the February 2 meeting, while the MPC kept UK rates unchanged at 4.75 percent on February 10.