All eyes on US as Fed expected to reveal economy contracted in Q1
The week ahead may bring some disappointing news from the United States.
Financial newswire Bloomberg reported that revised data is expected to show that the US economy probably contracted for the first time in a year last quarter.
The data, to be released on Friday, is expected to show that a wider trade deficit and less inventory investment than initially estimated is probably responsible for the markdown after a previously reported 0.2pc annualised gain in GDP.
Federal Reserve Chair Janet Yellen said on Friday that she still expects to raise interest rates this year, if the economy meets her forecasts, with a gradual pace of tightening to follow.
While the labour market is nearing full strength, "we are not there yet",she said in a speech prepared for delivery in Providence, Rhode Island.
"If the economy continues to improve as I expect, I think it will be appropriate at some point this year to take the initial step to raise the federal funds rate," she said.
Echoing the Fed's April statement, Ms Yellen said she expects the economy to return to a "moderate" pace of growth after a disappointing first quarter as headwinds, including a cooling global economy, gradually abate.
She repeated that policy isn't on a pre-set course and the Fed may tighten more quickly if the economy performs better than expected or raise rates at a slower pace if it disappoints.
Delaying the first rate increase until employment and inflation return to the Fed's objectives "would risk overheating the economy," Ms Yellen said.
On the domestic front this week, European Economics Commissioner Pierre Moscovici will be in Dublin to address both a conference organised by the Institute for International and European Affairs, and the Oireachtas Finance Committee. At the IIEA conference in central Dublin, Mr Moscovici and European Affairs Minister Dara Murphy will deliver keynote addresses.
They will then join a panel discussion with Stephen Kinsella, senior lecturer in economics at the University of Limerick, and Loretta O'Sullivan, Group Chief Economist at the Bank of Ireland.
Mr Moscovici will then move to address TDs and senators at the Oireachtas Finance Committee, where he will discuss the Country Specific Recommendations for Ireland.
The former French Finance Minister said recently that the legacy of the crisis in Ireland continues to be felt, especially in the high levels of public debt.
"That's why we strongly encourage the Irish authorities to proceed with the implementation of key structural reforms and to make the most of the benign economic climate and to proceed with the fiscal consolidation that remains necessary to keep public debt on a steady downward path,'' he told reporters recently after a meeting of Eurozone finance ministers in Brussels.
Later in the week, a delegation of members of the Special Committee on Tax Rulings of the European Parliament will also travel to Dublin.
The delegation, led by Alain Lamassoure, will meet Finance Minister Michael Noonan, members of the Finance Committee of the Dáil and, experts representing accountancy firms, business associations, NGOs and companies.
We'll also get the latest on what's going on with house prices.
The Residential Property Price Index from the Central Statistics Office is released on Wednesday. In the year to March, residential property prices at a national level rose by 16.8pc.
Alan McQuaid of Merrion Stockbrokers forecasts that an increase of 12pc in prices is expected this year.
(Additional reporting: Bloomberg)