The main economic release in the euro area within the next two weeks will be GDP numbers for Q1 13. We estimate that the euro area contracted 0.2% q/q in Q1 13.
In China, most hard data for April is due to be released over the next two weeks. Overall, we believe data rebounded in April on the back of the overall very weak March data. It should bring some relief to the market.
Japanese data is set to confirm that the Japanese economy is now recovering relatively strongly.
Norges Bank is expected to keep rates unchanged at the meeting on May 8. However, risk is tilted towards a rate cut after the recent moderate pay deal and after surprisingly low inflation in March.
In Sweden, the downward revision of the rate path by the Riksbank due to low inflation has put inflation data at the fore again. We see downside risk to the inflation release on May 14.
Global Update
- The ECB slashed the refi rate by 25bp to 0.5% and kept the deposit rate unchanged at 0.0%. The door was opened for lower or even negative rates.
- The cut followed a drop in euro area inflation to 1.2% in April from 1.7% in March.
- Chinese PMI data indicated that the Chinese recovery has lost further momentum.
- Minutes from the Riksbank's latest monetary policy meeting showed that household debt is still high on the agenda at the Swedish central bank.
- Norwegian key indicators suggested that the soft patch seen in the economy in Q4 12 has now come to an end.
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