Focus on Eurozone retail sales and German industrial data
Next week looks set to be a light week for the Eurozone, although April retail sales could be interesting as one of the first 2Q18 hard data points. Germany was strong and a good month for sales could be in the making for the Eurozone overall. The entire batch of German industrial data should also provide further evidence of a gradual rebound of the economy in the second quarter.
Services PMI to give steer on UK second quarter growth
Next week’s PMIs will be a key input into the Bank of England’s thought process, as it seeks to establish how much of the first quarter slowdown was temporary. We may see a bit of an uptick in the services index following the better weather over the past few weeks (particularly around the early-May bank holiday weekend, which will have helped retailers). But the economy continues to be plagued by Brexit uncertainty and in the consumer sector specifically, lower household demand, so any PMI increase is likely to be relatively modest.