The German IFO business survey will give more information about whether thenegative impact from the global slowdown in Q1 is about to fade. We expect theexpectation component to decline whereas the current assessment index shouldcontinue to improve, reflecting the current strength of the German economy.Yesterday German PMI manufacturing increased marginally and the details showedthe new export orders component is declining at a slower pace after it peaked inJanuary.
In the US we expect new home sales to have increased modestly in May after alarge jump in April. Yesterday existing home sales data for May surprised to theupside resulting in a strong rebound in April and May after being on a declining trendfrom July last year to March this year. New home sales constitute a small share oftotal home sales and have historically been a lot more volatile than existing homesales.
US consumer confidence is also due for release and is expected to increase to 83.5in June from 83.0 in May. If this consensus expectation proves right, it will be thestrongest sentiment among consumers in around six years.
Following last week’s FOMC meeting, the Fed’s Plosser speaks on economicoutlook and monetary policy and is expected to hold a Q&A. Plosser is consideredhawkish and the risk is that he will put more focus on the recent higher core inflationeven though the Fed continued its dovish tone last week.
ECB’s Coeure also speaks today at a policy panel on “rethinking economics afterthe crisis” in connection with the ESCB’s Macro-prudential Research Network.
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