Equities and bond markets are mostly trading higher today.  The dollar is little changed against the euro and yen but is softer against the dollar-bloc.  Sterling extended is a post-election rally with the help of a gain in average weekly earnings, but returned offered after a somewhat more dovish BOE Quarterly Inflation Report.    

The focus of the North American session will be on the April retail sales report.  The market may look past a soft headline figure and focus on the GDP components.  A small pullback in auto sales and cheap gasoline may weigh on the headline.  Recall that the March rise of 0.9% was the strongest in a year.   The GDP component rose 0.3% in March after falling for three months.  The consensus expects a 0.5% increase in April.  With the bounce back in non-farm payrolls in April, stronger consumption suggests that the economy is recovering in Q2 from what looks like a contraction in Q1.  

The eurozone grew 0.4% in Q1 after a 0.3% expansion in Q4 14.  This was in line with expectations. The country breakdown was surprising. German grew by 0.3%.  The consensus was for 0.5% after 0.7% in Q4 14.  France surprised with a 0.6% expansion.  The market expected a 0.4% after stagnating in Q4 (initially up 0.1%).  Italy also bettered expectations, expanding by 0.3% instead of 0.2%.  This was only the second quarter since Q2 11 that the Italian economy has grown.  The weak euro, lower interest rates and the fall in oil prices helped fuel the expansion.  

The fact that the France grew faster than Germany seems a bit of a fluke.  It appears the French growth may have come via inventory growth rather than final demand.  In any event, no one is bound to conclude that the outperformance of France heralds a change in relative strength.  The same may be said for the US.  The eurozone grew faster in Q1 than the US, but this is unlikely to be sustained, even if it is repeated to a lesser extent in Q2.   Consider than on year-over-year basis, the US economy grew by 3% in Q1 15.  The eurozone grew 1%.