The U.S housing market will be in focus with the release of the NAHB housing index, building permits and housing starts. We expect data to show a continuation of the recovery in the housing market.
Chinese Q1 GDP is scheduled for release next week. Industrial production data suggest that GDP growth accelerated only marginally in Q1.
On Thursday, the Italian parliament will meet to elect a new president. The vote will be vital as it is up to the successor of outgoing President Giorgio Napolitano to find a way out of the current political deadlock.
Global Update
There is considerable focus on Japanese investor behaviour in the wake of the aggressive easing announced by the BoJ last week. With Japanese yields very low and continued expectation of a JPY weakening, Japanese investors are looking abroad for return. It triggered renewed demand for euro area bonds this week, and in general underpins the performance of risk assets.
FOMC minutes showed that members were generally in favour of ending asset purchases this year.
In Portugal, the constitutional court rejected four austerity measures. Prime Minister Coelho said the shortfall will be covered by unspecified spending cuts.
Chinese inflation fell markedly to just 2.1% in March. Other data pointed to a gradual recovery in Chinese growth.
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