Purchasing managers could report on Monday that growth in the region has increased to a four-year high. The National Bank of Belgium's business climate indicator - a bellwether for the eurozone - might not be quite so strong, but even it could hit a 12-month high. Germany's Ifo survey could show that businesses' current trading conditions and optimism are both at their highest level since last June. And the ZEW survey could show that German financial professionals' optimism is well above average at its highest level for over a year. And all of this is before the effects of quantitative easing are felt.
We might also see reasons for optimism in the US. Sales of both new and existing houses should be well up on a year ago. This matters, because it should be a sign that households are confident about their future incomes. This would suggest that weak economic activity in the first quarter was just a temporary blip, rather than a serious downturn.
Durable goods orders on Friday should be consistent with this. They are expected to show a rise in March, reversing February's fall.
We should also see signs of good growth in the UK. Although Thursday's official retail sales numbers could show only slight growth in March, this would follow a good February. Sales volumes are likely to be up by 5 per cent year on year and 1.1 per cent quarter on quarter. This refutes fears that low inflation would cause customers to reduce spending in the hope of better bargains in the future. Instead, it suggests that increased confidence and employment are offsetting still-weak real wage growth.
We'll see in Wednesday's minutes of their last meeting what the MPC makes of all this. It is likely to have voted unanimously to keep interest rates unchanged. This could be because the possibility that low inflation will reduce inflation expectations and hence future inflation outweighs the potentially inflationary effect of falling unemployment.
