Manufacturing and service sector figures for the eurozone will be watched closely on Wednesday for any sign that bearish fears on growth prospects might have been exaggerated.

Markets took some comfort last week from the fact that fourth-quarter gross domestic product in the eurozone was not as bad as expected – even containing a welcome spurt of economic expansion in France.

“Data in the eurozone are still playing second fiddle to Greek political and economic events,” said Victoria Cadman at Investec. “However, data releases for the week ahead look set to provide important barometers of whether the earlier gloom on the euro area’s growth prospects has been overdone – and whether the eurozone will return to growth after its 0.3 per cent quarter-on-quarter contraction in the fourth quarter of 2011.”

Purchasing managers’ indices for the euro area are set to be a crucial test. “With the eurozone’s January composite PMI having implied the eurozone returned to growth again, hopes are now pinned on a further recovery showing through in February’s out-turn,” added Ms Cadman.

January’s composite figure of 50.4 was the first time the overall index had risen above the no-change level of 50 since last August. The analysts’ consensus expects a further rise to 50.6 for February.

“The PMIs will give an important indication of to what extent the renewed uncertainty about Greece will impact hard data,” said Allan von Mehren of Danske Bank. “We expect modest improvements, which will be seen as a confirmation that growth has returned to the euro area in the first quarter.”

But analysts at Capital Economics were more cautious, adding: “Despite the recent rebound, the composite index remains below the equivalent US and UK indices. It might fall from 50.4 to 50.2 or so, which would leave it consistent with stagnant GDP.”

Also providing more eurozone clues will be Thursday’s German Ifo business climate survey. “We are pencilling in an Ifo reading of 108.8, which would represent its highest level since July,” said Ms Cadman.

Housing will provide the bedrock of US releases this week with the focus on any more indications of a pick-up after last week’s encouraging housing starts data for January. Wednesday will see existing homes sales figures published, with house prices following on Thursday and new home sales on Friday.

“In spite of the improvement in the sales of existing homes, we are still not seeing any signs of take-off in new home sales,” said Mr von Mehren. “We expect the figure to remain flat in January, far from the boost the housing market needs in order to start being a positive contributor to growth.”

In the UK, Wednesday’s release of minutes from this month’s Bank of England meeting that voted for an extra £50bn of quantitative easing will be studied for signs of any dissension among Monetary Policy Committee members.

“Although we expect the minutes to show the discussion to have been more lively, with a wider range of views than in October when the MPC last sanctioned further QE, we do expect the vote itself to have been unanimous,” said Ms Cadman. “A unanimous vote may well raise expectations that a further slug of QE will be forthcoming at some point.”

HSBC analysts added: “More interesting would be if some members voted for a larger extension of QE as this could increase the probability of more QE later in the year. The more dovish Adam Posen could have voted for an extra £75bn, while the historically hawkish members, such as Spencer Dale, may have preferred not to extend gilt purchases.”

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