Fed to decide on rates

In the US, market participants will focus on the Federal Open Market Committee meeting where the Federal Reserve is expected to keep rates on hold. On the data front, the US will furnish the markets with various economic indicators. Market participants will receive more housing market data in terms of the new and existing home sales, MBA new mortgage applications, and the Case Shiller Home Price Index for April.

The latter is a measure of the residential real estate market, tracking changes in the value of real estates in 20 metropolitan countries across the US. Elsewhere the personal income report is also due this week containing, among other things, details of personal income, spending and consumption. Sentiment indicators in particular consumer confidence and University of Michigan Confidence Survey will highlight the strength of consumer sentiment in the US economy. Markets will have some employment figures along with the durable goods order for May and final Gross Domestic Product (GDP) for the first quarter.

In Euroland, the main focus will be spread between the area wide manufacturing and services Purchasing Manager Index (PMI). Eurozone industrial new orders will provide market participants with a view on the real economic activity during the manufacturing sector in the second quarter. Markets will also evaluate the Eurozone current account figures for April. Meanwhile, market participants will receive some regional consumption trends across the Eurozone with the French and Italian consumer confidence, French consumer spending and the Italian retails sales figures. Germany and Spain will close this week's data flow by the release of the Harmonised Index of Consumer prices (HICP) flash.

In the UK, markets will scrutinise the final estimate of the Gross Domestic Product for the first quarter. Total business investment figures and current account figures for the first quarter are also due this week. The release of the CBI June Distributive trades report will complete the week as far as data releases are concerned.

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