ECB and EZ watch: data will be closely watched this week - ANZ

Analysts at ANZ explained that after the disappointment of the UK and France Q1 GDP data, Q1 euro area data this week will be closely watched.

Key Quotes:

"Data out of Spain and Austria were strong, suggesting the weakness is not universal. That said, the Q1 story seems to be discounted for now and the market’s focus is squarely on the evolving Q2 data."

"April HICP data for the euro area will be important given that the ECB governing council has reaffirmed its confidence in the inflation outlook despite acknowledging a “moderation” in growth momentum. Consensus estimates are looking for core inflation to ease to 0.9% vs 1.0% and that may be sufficient to maintain a defensive approach towards the ECB for now."

"Any change in tone towards a more hawkish stance would likely rattle markets, given the tightening in monetary conditions being seen elsewhere (eg US 10-year yields knocking at the door of 3%). However, there is no obvious catalyst on the horizon for such a change in stance despite the steady lift in oil prices seen over the last year."