We forecast a growth rate of 0.4% in the euro area in Q1. If this proves right, it will be the fourth consecutive quarter of positive growth and the strongest quarterly growth rate in three years. Our country-specific estimates are German GDP at 0.7%, France at 0.1% and Italy at 0.2%.
The ECB publishes its monthly bulletin and focus will be on inflation expectations in the Survey of Professional Forecasters. Final euro HICP is also due for release and it should be unchanged at 0.7%.
In the US we expect core CPI to continue its weak momentum but headline CPI should be a bit higher as both gasoline and food prices increased in April. Core PPI has turned higher in recent months, which supports the case for bottoming US inflation.
US jobless claims are expected to hover around 320k, which is around the level in 2007. Also in the US we expect industrial production to increase marginally, while the NAHB housing market index should move sideways.
The energy market will focus on the release of IEA's monthly oil market report.
Note there are a number of central bank speeches including ECB's Constancio and Mersch and Fed chairman Yellen, who speaks overnight.
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