After the market gains of the last couple of days we could well get a pause for reflection in Europe with equity markets set to open slightly lower. The disappointing economic data this past two weeks from Germany has raised market expectations of an ECB rate cut next week, but there remains considerable doubt as to whether it will be of any use without additional non standard measures to supplement it. With doubts about the wisdom of the current EU austerity policy starting to find more of a voice throughout Europe from the EU commission to national governments all over, it is timely that we will get to see the continued effects of that policy in the form of Spanish unemployment numbers due out this morning for Q1, which are expected to increase from 26% to 26.5%. Also suffering a lack of growth, but not to anywhere near the same extent as most of Europe, we also have the latest UK Q1 GDP numbers where the odds are evenly balanced as to whether the UK economy will tip back into recession and herald the dreaded triple dip, or just about eke out some form of positive growth. It is no secret that both the construction and manufacturing sectors have had a rough three months, whether due to low exports, a lack of demand, or bad weather, however they only make up about 20% of the UK economy, and in March there was some evidence that activity did appear to be starting to pick up. The services sector on the other hand, which makes up the remainder of the economy has remained fairly resilient in spite of consumers being somewhat cash strapped, due to high inflationary pressures, and the unseasonably cold weather. Looking at the net retail sales numbers over the first quarter we saw a net gain of 0.8%, whereas in the months of Q4 we saw a net drop in retail sales of 0.9%. Given that we know the UK economy contracted by 0.3% in Q4 this positive number in Q1 could well see the UK eke out some form of growth in Q1. The amount of growth to all intents and purposes is likely to be economically insignificant, but in a political context it is very important for the credibility of the government’s current policy, being the difference between a triple dip recession or not. As far as sterling is concerned the numbers aren’t likely to be that significant unless they miss expectations by a huge amount on either side, with analysts predicting growth of 0.1%. In the US investors will be hoping that things on the employment front continue to remain broadly positive after yesterday’s poor durable goods data, which showed a 5.7% drop in March. Weekly jobless claims are expected to come in at 352k, unchanged from last week, however US investors are more likely to have one eye on tomorrow’s Q1 GDP number which is expected to show growth of 3.1%, up from Q4’s 0.4%. Given the weakness of recent data it is somewhat surprising that this 3.1% estimate hasn’t been revised lower, especially in light of the poor data seen in March, from employment, retail sales, existing home sales and durable goods yesterday. The risk is markets are building up for significant disappointment tomorrow. Astrazeneca will report Q1 earnings after yesterday’s beat from GSK. Expectations are poor, with analysts forecasting a 26% drop in earnings YoY. Revenues have been in decline for the last 4 quarters straight and most analysts favour sitting on the fence with over 60% of them rating the stock a Hold. Reports that they will team up with Bind therapeutics in a £130m deal to develop a new cancer medicine is testament to new CEO Pascal Soriot’s attempt to boost a flagging product range. Consumer goods firm Unilever will release their Q1 trading statement today. The stock fairs better than its major competitors with analysts, with 60% rating the stock as a buy, compared to under 50% on average for names in the same space. One of big names backing the stock are UBS, who have a Buy rating on the stock, citing an expectation of increased sales from its food products as well as the possibility of acquisitions in the emerging market space. Unilever is up 18% for the year to date. Elsewhere, Taylor Wimpey will release an Interim management statement in the wake of being named as the preferred bidder for a 474 home regeneration project near Wigan earlier this week. Ratings agency Fitch took the decision to upgrade the homebuilder earlier this month from B1 to Ba3 following a surge in reported profits for 2012, and a brighter outlook for UK construction. Today will also see Interim management statements from Croda International and Dialight, as well as a trading statement from Admiral Group. CMC Markets is an execution only provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.