Data Heavy Session to End the Week

• Volatility expected as we get a barrage of data and earnings;

• ECB helpless as eurozone seen falling back into deflation territory in April;

• US Inflation data key as core PCE closes in on Fed’s target.

European equity markets are expected to open around 1% lower on Friday, as similar losses in the US weigh on investor sentiment as we head into the end of the week.

With a large amount of economic data to come throughout the European session though, traders will have to remain on their toes on Friday as things could get quite volatile. There are a number of tier one releases among those being released today which should make things interesting, not to mention the fact that earnings season is continuing in the background with a number of big companies reporting today. With all this going on, I wouldn’t be surprised to see some significant swings in the market throughout the day as investors respond to all the new information.

The economic data has already started flowing, with French preliminary first quarter GDP and German retail sales figures being released. It’s been a mixed start, with the French economy expanding by 0.5% in Q1, slightly ahead of expectations, while the Q4 reading was also revised higher by 0.1%. German retail sales on the other hand were quite poor, having dropped for a second month and recorded the largest decline since June.

Still to come this morning we’ve got flash GDP data from Spain, which is expected to record another quarter of impressive growth at 0.7%. The economy appears to be cooling though having peaked in the middle of last year and this would actually represent its slowest quarterly growth since the fourth quarter of 2014. Also to come from the eurozone we’ll get the latest unemployment number, which is expected to remain at 10.3%, and the preliminary reading of April’s inflation data, the headline reading of which is expected to dip back into negative territory despite the ECBs best efforts to stimulate the region.

There’s plenty more to come from the US later, most notably personal income and spending data, as well as the Fed’s preferred inflation measure – the core personal consumption expenditure price index. Any uptick in the number here, which the Fed has indicated that it doesn’t expect, could see pressure rise on the central bank to raise interest rates in June given that it’s already close to target at 1.7%. We’ll also get UoM consumer sentiment data this afternoon and finally to cap things off this week, the Baker Hughes oil rig count.