Euro Area economy contracts

The euro is little changed against both the dollar and sterling from where it closed last Friday, trading this morning at around $1.20 and just over 86.5p respectively, while the pound is hovering above $1.3850 against the US currency

Stocks in Europe and the US advanced a little at the start of this week, while German and US 10-year bond yields nudged down to -0.20% and 1.61% respectively

The Euro Area economy contracted for a second quarter in a row in the first quarter of this year, with GDP falling by 0.6% leaving it almost 2% below its level in Q1 020. High frequency data suggests the economy ended the first quarter on a positive note however

Inflation in the Euro Area picked up further in April according to the flash estimate, rising to an annual rate of 1.6% from 1.3% in March, though the core (or underlying) rate dipped  for a third month running to stand at  0.8%. Meanwhile, the unemployment rate nudged down to 8.1% in March from 8.2% in each of the two prior months

The Bank of England’s Monetary Policy Committee meets this Thursday but is likely to keep both interest rates and the size of its bond purchases programme unchanged

Data due this week includes the latest employment report in the US on Friday, with the consensus expecting another strong month of job gains in April – of almost 1 million – following an increase of 916k in March