Today's main event is the FOMC-meeting, see FOMC preview: Fed to downplay Q1 data weakness , 27 April. A statement from the meeting will be released at 20:00 CET and there will be no press briefing nor updated projections. Overall we do not expect major changes in the statement and hence it should still keep in play a rate hike later in 2015. The statement will probably acknowledge the weakness in recent data but regard the soft patch as caused at least in part by temporary factors. On the other hand, the statement is likely to note that inflation has stabilised recently.
Ahead of this evening's FOMC-meeting the first estimate for Q1 GDP growth will be released in the US. We expect GDP growth to have eased markedly to just 0.8% q/q AR in Q1. Both net exports and fixed investments are expected to have been a drag on growth in Q1. We expect private consumption to have increased 2.0% q/q AR in Q1 and this is also a slight disappointment in light of the strong employment growth and lower gasoline prices. The weakness in Q1 has in our view to a large degree been driven by temporary factors including the weather and we expect GDP growth to rebound in Q2.
Germany will release consumer prices for April with the first Länder reporting early today. The German inflation data will give the first indication on the preliminary inflation data for the euro area to be released tomorrow. We expect German HICP inflation to have accelerated to 0.3% y/y in April from 0.1% y/y in March, mainly because of a less negative contribution from the lower oil price but core inflation could have edged slightly higher. In the euro area money supply and credit growth for March will also be released. We expect both to have accelerated further in March.
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