Ahead of ZEW releases on Tuesday, economists are expecting improvements in the German and euro zone economic sentiments, rising to -37.0 and -44.2 from the previous month's readings of -40.7 and -44.8 respectively.

Klaus Scheuefer, economist at SEB Banken, is forecasting economic sentiment in Germany to come in at -38.0. He also expects euro zone economic sentiment to improve slightly to -42.0 and the current situation in Germany to slip to 30.0 from 33.2.

"We had some good figures, like German GDP for example yesterday and, therefore, we expect the situation to get a little bit better," Scheuefer said. "But, all in all, we are in at a very low level."

Economists are expecting falls in all three Ifo indicators. The business sentiment is forecast to fall to 102 from 102.4, the current assessment indicator is expected to tumble to 108 from 108.4 and the expectations indicator is forecast to drop to 96.4 from 96.8.

"The hope that the German economy can decouple from the downturn in the industrialised countries has risen by the strong first quarter growth, but the deterioration in the Ifo business climate point in another direction", Commerzbank economists suggested in a research note.

"After the massive drop by 2.4 points in April, we expect as the consensus another mild decline for May to 102.0. It is in particular the expectations component that has likely continued to fall."

On Friday, German and euro zone PMIs will be released. The German manufacturing PMI is expected to slip to 53.2 from April's 53.6, while the services PMI is forecast to fall to 54 from the previous month's 54.9.

The euro zone composite PMI is forecast to decline 51.5 from 51.9. Services and manufacturing are expected to fall 51.7 and 50.5 from 52.0 and 50.7 respectively.

"The May flash euro-zone PMI surveys should point to a sharp deceleration in GDP growth in Q2 after Q1's stronger than expected 0.7% q/q expansion," a Capital Economics research note suggested. "But just as worryingly, the survey is likely to show that pipeline inflationary pressures are still building."

All times in EDT

Sunday:

In the UK, Rightmove House Prices for May will be released. In April, prices fell 0.10% on a month-over-month basis and increased 1.30% year-over-year.

3:00 EU EU's Almunia Attends EBRD Annual Meeting in Kiev

19:01 UK Rightmove House Prices (M/M) May Prior: -0.10%

19:01 UK Rightmove House Prices (Y/Y) May Prior: +1.30%

Monday:

The Bank of France will release its business sentiment data for April. The indicator last came in at a reading of 105. Markets will also receive European Union construction output data for March. European construction output last increased 1.20% month-over-over and gained 4.30% year-over-year.

2:30 EU France Bank of France Business Sentiment April Prior: 105

5:00 EU Construction Output (M/M) (SA) March Prior: 1.20%

5:00 EU Construction Output (Y/Y) (WDA) March Prior: 4.30%

Tuesday:

German and European markets will receive ZEW survey data for May. In Germany, the current situation indicator is expected to come in at -44.2 following the previous reading of -44.8. Expectations are for the German economic sentiment component to come in at -37, last coming in at -40.7. Euro zone economic sentiment is expected at -44.2, up from a prior reading of -44.8.

2:00 EU Germany Producer Prices (M/M) April Exp: 0.50% Prior: 0.70%

2:00 EU Germany Producer Prices (Y/Y) April Exp: 4.70% Prior: 4.20%

4:00 EU Italy Industrial Orders (M/M) (SA) March Exp: -2.20% Prior: 2.00%

4:00 EU Italy Industrial Orders (Y/Y) (NSA) March Exp: 1.50% Prior: 14.30%

4:00 EU Italy Industrial Sales (M/M) (SA) March Exp: -0.80% Prior: 0.80%

4:00 EU Italy Industrial Sales (Y/Y) (NSA) March Prior: 9.00%

4:30 EU Italy Current Account March Prior: €-4701M

5:00 EU Germany ZEW Survey (Economic Sentiment) May Exp: -37 Prior: -40.7

5:00 EU ZEW Survey (Economic Sentiment) May Exp: -44.2 Prior: -44.8

5:00 EU Germany Zew Survey (Current Situation) May Exp: 32 Prior: 33.2

13:30 EU EU's Almunia at 'Dealing with the Credit Crunch' Debate

Wednesday:

In the UK, markets will receive the minutes from the Bank of England's monetary policy meeting on May 8. Interest rates were maintained at 5.00% following that meeting. Also on Wednesday, German Ifo sentiment figures for May are scheduled to be released. The business climate component is expected to drop to a level of 102, down from a previous reading of 102.4 and the current assessment component is expected to decrease to 108 from 108.4. The expectations indicator is expected to decrease as well and come in at 96.4, down from a previous reading of 96.8.

4:00 EU Germany IFO - Business Climate May Exp: 102 Prior: 102.4

4:00 EU Germany IFO - Current Assessment May Exp: 108 Prior: 108.4

4:00 EU Germany IFO - Expectations May Exp: 96.4 Prior: 96.8

4:30 UK Bank of England Minutes of Interest Rate Decision

4:30 UK Public Finances (PSNCR) April Exp: -2.5B Prior: 12.7B

4:30 UK Public Sector Net Borrowing April Exp: 1.5B Prior: 10.2B

4:30 UK M4 Money Supply (M/M) April Preliminary Exp: 0.60% Prior: 0.80%

4:30 UK M4 Money Supply (Y/Y) April Preliminary Exp: 11.10% Prior: 11.90%

4:30 UK M4 Sterling Lending (BP) April Preliminary Exp: 16.0B Prior: 17.4B

Thursday:

European Central Bank Governing Council member Axel Weber is scheduled to speak in Germany concerning the Deutsche Bundesbank, of which he is also president. Meanwhile, European Competition Commissioner Neelie Kroes is scheduled to speak in Slovenia at the European Competition and Consumer Day conference. Italian retail sales for March will be released on Thursday and are expected to decrease 0.20% month-over-month and increase 0.60% year-over-year. Meanwhile, UK markets will receive retail sales data for April. Expectations are a 0.50% month-over-month decrease and a 4.20% increase year-over-year.

3:00 EU ECB's Weber Speaks in Eltville, Germany

3:15 EU EU's Kroes Speaks at an Event in Slovenia

3:30 EU Italy Consumer Confidence Index (SA) May Exp: 99.4 Prior: 99.8

4:00 EU Italy Retail Sales (M/M) (SA) March Exp: -0.20% Prior: 0.30%

4:00 EU Italy Retail Sales (Y/Y) March Exp: 0.60% Prior: 2.70%

4:30 UK Retail Sales (M/M) April Exp: -0.50% Prior: -0.40%

4:30 UK Retail Sales (Y/Y) April Exp: 4.20% Prior: 4.60%

4:30 UK Total Business Investment (Q/Q) 1Q Preliminary Exp: 0.30% Prior: 1.80%

4:30 UK Total Business Investment (Y/Y) 1Q Preliminary Exp: 5.50% Prior: 1.70%

5:00 EU Industrial New Orders SA (M/M) March Exp: -0.50% Prior: 0.60%

5:00 EU Industrial New Orders (Y/Y) March Exp: 4.80% Prior: 9.90%

6:15 EU EU's Fischer Boel Meets Sheep and Cattle Association

8:30 EU EU's Piebalgs Attends Event in Prague

22-May EC Bank of Portugal Publishes Statistical Bulletin

Friday:

Amidst a flurry of European data on Friday, British markets will receive preliminary first-quarter GDP figures. Expectations are for a 0.40% quarter-over-quarter increase, in line with its previous growth rate. Meanwhile, the European PMI composite for May is expected to come in at 51.5, down from a previous 51.9 reading. The manufacturing component is expected to come in at 50.5 with the services component expected at 51.7. The manufacturing component of German PMI for May is expected at 53.2 and the services component is expected to show a reading of 54. Regarding French PMI for May, the manufacturing component is expected at 51 and the services component is forecasted to come in at a level of 52.9.

2:45 EU France Consumer Spending (M/M) April Exp: 0.50% Prior: -1.70%

2:45 EU France Consumer Spending (Y/Y) April Exp: 2.00% Prior: 1.20%

3:00 EU France Purchasing Managers Index Manufacturing May Preliminary Exp: 51 Prior: 51.1

3:00 EU France Purchasing Managers Index Services May Preliminary Exp: 52.9 Prior: 52.8

3:30 EU Germany Purchasing Managers Index Manufacturing May Advanced Exp: 53.2 Prior: 53.6

3:30 EU Germany Purchasing Managers Index Services May Advanced Exp: 54 Prior: 54.9

4:00 EU Italy Trade Balance Non-Eu (Euros) April Exp: -1810 Prior: -1212

4:00 EU Italy Istat Releases Preliminary GDP Figures for 2007 Q4 and 2008 Q1

4:00 EU Purchasing Managers Index Manufacturing May Advance 50.5 Prior: 50.7

4:00 EU Purchasing Managers Index Services May Advanced Exp: 51.7 Prior: 52

4:00 EU Purchasing Managers Index Composite May Advanced Exp: 51.5 Prior: 51.9

4:30 UK GDP (Q/Q) 1Q Preliminary Exp: 0.40% Prior: 0.40%

4:30 UK GDP (Y/Y) 1Q Preliminary Exp: 2.50% Prior: 2.50%

4:30 UK Private Consumption 1Q Preliminary Exp: 0.50% Prior: 0.20%

4:30 UK Government Spending 1Q Preliminary Exp: 0.50% Prior: 0.90%

4:30 UK Gross Fixed Capital Formation 1Q Preliminary Exp: 0.20% Prior: -0.50%

4:30 UK Exports 1Q Preliminary Exp: 1.00% Prior: -0.50%

4:30 UK Imports 1Q Preliminary Exp: 0.50% Prior: -1.20%

4:30 UK Index of Services (3mth/3mth) March Exp: 0.50% Prior: 0.30%

5:00 EU Italy GDP (Q/Q) (SA) (WDA) 1Q Preliminary Prior: 0.20%

5:00 EU Italy GDP (Y/Y) (SA) (WDA) 1Q Preliminary Prior: 0.40%

By Todd Wailoo, This email address is being protected from spam bots, you need Javascript enabled to view it , with contributions from Ryan Szporer, This email address is being protected from spam bots, you need Javascript enabled to view it , edited by Nancy Girgis, This email address is being protected from spam bots, you need Javascript enabled to view it