Consumer confidence in the euro area is expected to hit its highest level since 2007 today. The index, published by the European Commission, is expected to rise to -3.7, up a full three points since last month’s reading. Consumer sentiment is undoubtedly a strong indicator for the economy, but other data released data will likely offer further hints at economic recovery. Business confidence and economic sentiment data will likely confirm a more optimistic outlook across the continent.
In Spain, year-on-year inflation to March is expected to remain in negative territory, with forecasts predicting a slight rise in prices to -1.03% from -1.1% in February. Month-on-month inflation is also expected to return to negative territory in March, having increased by 0.2% in February. However, low inflation figures do not appear to be of major concern to Spanish policy makers, who have noted that Spanish households are spending more as a result of lower prices.
The positive outlook may be undermined somewhat by the impasse between Greece and the country’s creditors. Athens has submitted proposals aimed at unlocking €7.2 billion in aid, yet reports suggest that the parties remain far apart in negotiations. There are fears that the Greek government could default on a €450 million loan from the IMF due for repayment next week.
Markets will be keeping a close eye on Yemen in the day ahead, as the conflict between Saudi forces and rebels in the capital Sana looks set to continue. The intervention on the part of the Saudi’s caused a brief spike in the oil price last week, and the situation could cause more volatility in the week ahead.