We forecast a growth rate of 0.4% in the euro area in Q1. If this proves right, it willbe the fourth consecutive quarter of positive growth and the strongest quarterlygrowth 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 inthe Survey of Professional Forecasters. Final euro HICP is also due for release and itshould be unchanged at 0.7%.
In the US we expect core CPI to continue its weak momentum but headline CPIshould be a bit higher as both gasoline and food prices increased in April. Core PPIhas turned higher in recent months, which supports the case for bottoming USinflation.
US jobless claims are expected to hover around 320k, which is around the level in2007. Also in the US we expect industrial production to increase marginally, whilethe 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 andMersch and Fed chairman Yellen, who speaks overnight.
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Danske Bank