UK GDP provides highlight amid election campaign

In many European markets the week will be shorter than usual thanks to the bank holiday on May 1.This week's highlights include an estimate of first-quarter gross domestic product in the UK which will come in the middle of an election campaign as well as rate announcements by the US, Swedish and New Zealand central banks.

Other data releases include GDP in the US, inflation and labour market data for Japan and the eurozone and some manufacturing surveys for the UK and US.

The preliminary estimate of first-quarter GDP for the UK is published on Tuesday. Survey data has pointed to a contraction in services, manufacturing and construction in January and February so the consensus is for a slight slowing in the quarter-on-quarter GDP growth figure, from 0.6 per cent in the fourth quarter of 2014 to 0.5 per cent in the first three months of 2015.

Wednesday will see the release of first-quarter GDP in the US and the latest meeting of the Federal Reserve's Open Market Committee. GDP growth is thought to have slowed in the US in the first quarter as well due to severe winter weather. Growth, which in the US is measured at an annualised rate, is expected to have slowed from 2.2 per cent in the previous quarter to 1 per cent.

At the meeting of the Federal Reserve on the same day, which will not be accompanied by either a press conference or new economic forecasts, the expectation is for no new substantial changes in either policy or the accompanying statement. Instead, the committee is likely to reaffirm its previous statements about the pace and timing of any rate rise.

The Swedish and New Zealand central banks will announce policy on the same day. In Sweden rates were gradually increased after 2010 in a policy that has been seen as exceptionally hawkish. However, since the end of 2011 the bank has been cutting rates and is now aggressively dovish in trying to ward off deflation. Rates went negative at the start of this year. It is likely that the repo rate will be cut even further at this meeting from minus 0.25 per cent to minus 0.35 per cent.

Eurozone labour market and inflation data are released on Thursday. Labour markets are expected to have improved again in March with the eurozone-wide unemployment rate falling from 11.3 per cent in February to 11.2 per cent. Inflation figures are liable to show that the eurozone remained in deflation.

Finally, on Friday, Japanese inflation and labour market data will be released as well as the ISM manufacturing survey for the US and the Purchasing Managers' Index for manufacturing in the UK.

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