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Euro Zone Braces for Month of Truth From Data in ECB Prelude

  • Upcoming surveys may signal if weakness is just temporary
  • Risks include protectionism, market correction, strong euro
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European growth looks set to recover in the second quarter, says Sarah Hewin of Standard Chartered.(Source: Bloomberg)
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European officials aren’t letting a first-quarter slowdown undermine their confidence in the economy, but an upcoming round of numbers may test their view that the winter blues will pass.

Descriptions by various European Central Bank policy makers have ranged from solid to robust and strong when asked about the recent performance. Even after Germany, the euro area’s economic engine, reported Tuesday that its rate of growth dropped by half, Governing Council member Jan Smets said the region has “strong momentum.” For outgoing ECB Vice President Vitor Constancio, the slowdown isn’t “such an unexpected or serious matter.”