Market movers ahead
In the US, we can look forward to an eventful week with plenty of key figures and FOMC speeches on the agenda, with Janet Yellen's (voter, dovish) speech on Friday.
We estimate US retail sales increased 0.2% m/m in April following a strong rebound in March.
We estimate euro area real GDP increased by 0.4% q/q in Q1 (up from 0.2% in Q4). Our country-specific estimates are German GDP at 0.7% q/q, Italian GDP at 0.2% and French GDP at 0.2%.
The Bank of England May Inflation Report could signal a shift towards an earlier rate hike in light of the recent strength in UK data.
We estimate Chinese industrial production accelerated slightly to 9.1% y/y in April, up from 8.8% y/y in March.
Global macro and market themes
This week we saw more confirmation of soft central banks. In the US, Fed chair Janet Yellen struck a dovish tone in her hearing before the Joint Economic Committee in the US Congress. In the euro area, the ECB clearly signalled a rate cut in June.
There are many signs that global growth is recovering from the weak spot in Q1, as both the US and China saw a lift going into Q2. In the past week, the Chinese recovery was confirmed by better export data for April.
The strong performance of risk assets among others is supported by dovish central banks and a reacceleration in global growth.
To Read the Entire Report Please Click on the pdf File Below