It turns out that the eurozone economy performed better than expected in the first quarter. A report on Tuesday showed that GDP was unchanged in the quarter, better than the 0.2 percent contraction most economists had expected. Germany grew 0.5 percent, offsetting contraction in places like Italy, which contracted 0.8 percent, and Spain, which contracted 0.3 percent.
Greek GDP contracted 6.2 percent year-on-year in the first quarter and things could get worse there as attempts to form a ruling coalition broke down on Tuesday. This development forces the country into another election next month, raising the spectre of a collapse of its bailout agreement and the country's exit from the euro area.
US economic data on Tuesday were mixed. Retail sales edged up 0.1 percent in April, its smallest gain since December. However, the New York Federal Reserve's Empire State general business conditions index jumped to 17.09 in May from 6.56 in April while the National Association of Home Builders/Wells Fargo Housing Market index rose to 29, the highest reading since May 2007, from 24 in April. Consumer prices were unchanged in April.
Economic reports from Asia on Tuesday were negative. Foreign direct investment in China in the first four months of this year fell 2.4 percent from a year earlier after a previously-reported 2.8 percent decline in the first quarter. Japan's consumer confidence index fell to 40.0 in April from 40.3 in March.