It’s becoming an all too familiar pattern, as economic data disappoints, markets fall back briefly, absorb the setback and then drag themselves back higher again, on the basis that central banks will be there to catch the ball, whenever it gets dropped. It seems this Teflon market doesn’t care whether the economic data is good, bad or just plain awful; the direction of travel remains the same as records continue to get broken on both sides of the Atlantic as stocks grind ever higher. A record close for the DAX yesterday was followed by yet another record close for the S&P500 and the Dow Jones. Despite this it looks as if we will see a lower European open this morning. Yesterday’s GDP data from Europe showed that the continent is in an even bigger slump than estimated with Germany just about eking out 0.1% growth in Q1, while France, Italy and the Netherlands all posted larger contractions in Q1 than originally estimated, as manufacturing activity continues to drag and unemployment levels push ever higher. There were some bright spots, notably the UK, which in spite of a small increase in unemployment saw a rather upbeat Mervyn King deliver his final Bank of England inflation report as Governor. He exuded a fairly upbeat tone delivering a cautiously optimistic verdict on the UK economy, upgrading the bank’s growth forecasts, while downgrading the inflation forecast. It wasn’t all good news though as average earnings continued to remain weak, rising 0.4% and further squeezing consumer incomes, relative to inflation. There was also good news from Japan this morning as the economy starts to feel the effects of Abenomics as Q1 GDP rose the most in a year with consumer spending helping push it up 0.9%, well above expectations, while industrial production for March also jumped 0.9%, well above expectations of 0.2%. This suggests the weaker yen is starting to have an effect, with exports also rising sharply. As for the US disappointing manufacturing and industrial production data for April points to a slow start for Q2 for the US economy with larger than expected drops in activity of 0.5%. Combined with a negative Empire manufacturing survey for May, coming in at -1.43 it seems the only part of the economy that appears to be showing any kind of recovery is the labour market. Weekly jobless claims are set to come in at 330k, up slightly from last week’s 5 year low at 323k. If today’s Philadelphia Fed survey shows similar weakness to the Empire survey it certainly seems reasonable to ask questions about the health of the manufacturing sector in the US as Q2 gets under way. Expectations are for a rise to 2.3 from 1.3. Irrespective of these concerns it does appear that inflation isn’t a worry at the moment with factory gate prices falling sharply by 0.7% in April, largely as a result of lower oil prices and if today’s April CPI numbers are similarly benign, which they are expected to be at -0.3%, then its reasonable to assume that talk of Fed tapering will once again be put to one side. Cuts from both Deutsche Bank and Barclays have seen resource firm Vedanta slide ahead of 2012 earnings release today. Deutsche have cut forecasts from “Buy” to “Hold” and Barclays have cut down to “equal weight”. The firms acquisition of Indian oil explorer Cairn India was cleared by the Supreme Court late last week, rejecting a petition that claimed the $8.67 billion deal was illegal. Also posting 2012 numbers are telecoms firm TalkTalk, who have been under pressure recently following BT Group’s announcement that it will be providing new sports channels carrying premier league matches for free to existing broadband clients. The aggressive move sent BSkyB and TalkTalk plunging on the May 9th statement, with the latter losing as much as 6%. The final stock reporting full year numbers is 3i Group, who announced an agreement to sell its 36.5% stake in flooring firm HTC Sweden for £12 million on Tuesday. We also have interim statements from Bumi, Capital & Regional, Travis Perkins and SIG rounding up today’s events. 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.