Markets Await Fresh Inflation, Economic Confidence Numbers From Europe

A busy day stands on the threshold carrying a batch of fresh economic fundamentals from inflation to economic sentiment indicators out of the United Kingdom and euro zone on Tuesday.

Featuring the day for the European economic agenda, Economic sentiment survey results from Germany and inflation from the U.K. are due today. The Office for National Statistics is scheduled to release U.K. consumer and producer prices for March. Annual inflation is called to hold around 2.8 percent.

Some analysts also see inflation accelerating to 2.9 percent. Coincidentally, the U.K. output prices inflation is expected to ease to 2 percent in March from 2.3 percent in February. Economists believe input prices will rise at a much slower pace of 0.7 percent, following a 2.5 percent rise in the prior month.

In Germany, the ZEW economic confidence survey results are due later today. The headline index is expected to slip to 41.0 in April from 48.5 in March. Today's data might confirm that sentiment towards Europe's largest economy is hardly immune to downbeat fundamentals out of the euro area.

Fears are clearly back in the markets since the finance ministers of the euro area backed the bailout of Cyprus, while optimism was shortly lived only to be shaken by fresh worries about the frustratingly higher cost of refinancing the 10 billion-euro rescue package of Mediterranean island.

Hectic moves across the markets are not expected to be caused by fruits of today's economic calendar. However, traders will be closely watching key numbers from Britain, where the annual inflation is expected to steady around the Bank of England's target of 2.0 percent, at 2.8 percent in March.

Lower energy prices probably weighed on inflation last month, while an easing inflation is just one of the reasons that might propped policy-makers to loosen up their grip on monetary policy to stimulate the British economy, suffering many setbacks in the past couple of years in the shadow of austerity.

The central bank is scheduled to publish the minutes of its latest policy meetings, when policy-makers likely voted 6-3 against further asset purchases. If it turns out that another member of the monetary policy committee joined the dove camp at the latest meeting then it could hammer the sterling.

IMOH, Clement I.
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