Opinions remain divided over Eurozone's direction

  • Eurozone consumer confidence may provide support for eurozone recovery (Tuesday)
  • UK Factor Order Book data could confound Brexit critics if another upturn is seen for April (Thursday)
  • US Q1 GDP has the potential to fuel further criticism of the Fed by Donald Trump, assuming another slow-down is posted (Friday)


The Eurozone Flash Consumer Confidence reading for April is due for release. While the official European Central Bank stance is that the pace of growth will pick up towards the end of the year, opinions remain somewhat divided about where the currency bloc’s economy is heading. After posting consecutive improvements from December’s reading of -8.3 and printing -7.2 for March, another increase to the forecasted -7.0 may provide some reassurance over the ECB’s view.


The German Ifo Business Climate Index provides a barometer of confidence amongst companies in the Eurozone’s largest economy. The reading steadily declined through the last half of 2018 before reaching a three year low of 98.7 in February. Expectations are that March will reveal a further improvement to 99.9. Again, as a forward-looking indicator, such a print would reinforce an improving EU outlook.

UK Public Sector Borrowing will be in focus today. The January print showed a record surplus, but this was revised lower in February. The March print, excluding banks, is expected to come in at +£0.2bn which would be well received.

UK Chancellor of the Exchequer Phillip Hammond will address the Treasury Select Committee today regarding the Spring statement. His address will be under increased scrutiny given the day’s Public Sector Borrowing data release, and proposed changes to government accounting treatments of student loans. A downbeat outlook could prove negative for Sterling. 


The Confederation of British Industry (CBI) Industrial Trends Orders print for April will be published today providing an indication of factory order books.  After March’s slightly worse than expected print of +1 against expectations of +2, forecasts are for a reading as high as +6 by some analysts. This would certainly go against the prevailing narrative that Brexit uncertainty is damaging the UK economy.

US Durable Goods Order data for March is set for release. The month-on-month figure contracted in February but is set to rebound with a forecasted figure of 0.8%. This would undermine the Federal Reserve’s dovish policy path.  It is important to note that weaker aviation sales are expected to weigh in the print in the coming months, due to grounding of Boeing’s 737 MAX aircraft.

Today, European Central Bank Vice President Luis de Guindos will speak in New York, while ECB’s Olli Rehn is due to speak about Eurozone monetary policy at a Bank of Finland Seminar. With opinions divided over the outlook for interest rates and a likely absence of other directional information, this could create some volatility for the common currency.


Q1 US Gross Domestic Product (GDP) will be released today. After recording 2.2% growth in Q4 of last year, the reading is forecast to come in at around 2%. That’s still a healthy annualised growth rate but shows a marked decline from the 4.2% recorded in Q2 2018, as the impact of Trump’s tax cuts fade. A shortfall has the potential for renewed White House criticism of the Federal Reserve, but so long as inflation holds around the 2% mark a more dovish stance over rates would be difficult to justify.