The Eurogroup meeting (Monday) will be mostly dedicated to Greece. Finance ministers will review progress on the negotiations for the conclusion of the programme, but an agreement is not expected that would unlock the payment of the remaining EUR7.2bn.
Activity data (Wednesday) are likely to print in line with the consensus forecast. The industrial production is expected to remain flat in March, after February's significant rise (1.1% m/m).
While this would be consistent with recent business surveys, which point to some improvement in manufacturing activity in Q1, the recovery remains subdued and the euro area industrial production index still well below its pre-crisis peak.
As such, the euro area faces significant headwinds and have reinitiated the short EURUSD trade.
"The euro area Q1 "flash" GDP is likely to increase 0.5% q/q, up from 0.3% q/q in Q4 14. Underpinning our expectation for Q1, we forecast German GDP to have risen 0.7% (consensus: 0.5%), while French GDP is expected to accelerate to 0.4% q/q (consensus: 0.7%), both with some upside risk. Spanish GDP, already released, was stronger than our and consensus expectations, at +0.9% q/q. We expect Italian GDP to post positive growth of 0.2% q/q (consensus: 0.2%)", Says Barclays.
