Europe midday: Stocks come off lows ahead of US data

European stocks came off their lows of the session, ahead of the release of US data on retail sales and consumer confidence with the Stoxx 600 on the brink of a third consecutive weekly loss.

The benchmark DJ Stoxx 600 was lower by 0.47% or 1.58 points to 331.53, alongside a drop of 0.12% or 32.92 points for Germany's Dax taking to 6,071.24 and a 0.44% or 18.84 point slide in the Cac-40 which was at 4,274.43.

Overnight, Boston Federal Reserve Bank President Eric Rosengren, who typically has a 'dovish' slant suggested he could back a June interest rate increase if recent economic trends continue, Market News International reported.

Keeping interest rates "too low too long" could lead to excessive speculation, he added.

Adding to cautious sentiment, on Friday the International Monetary Fund warned Brexit might set off volatility in financial markets, resulting in "sharp" drops in home and equity prices, impacting economic growth and erode London's standing as a financial centre.

“The bounce in oil earlier this week is fizzling out, which reinforces the idea that we should be cautious about the current outlook,” said IG analyst Chris Beauchamp.

“People just don’t seem to believe in growth for the equity market and prefer staying on the sidelines. Investors are nervous ahead of retail sales, which has been an underlying theme this week.”

Weather Gods not behind German GDP

On a more positive note, Germany's economy expanded in the first quarter of the year more quickly than economists had predicted, with gross domestic product expanding at a 0.7% quarter-on-quarter clip (consensus: 0.6%).

The data, which showed household and government spending offsetting weak demand from overseas, left economists divided on the outlook in its wake.

"The key question is whether this marks the beginning of a sustained upturn. We doubt it.[...] We think the Q2 story will be the inverse of Q1. Domestic demand will slow, but net exports likely will rebound slightly. Overall we think quarter-on-quarter growth will fall back to about 0.2%-to-0.3%," Claus Vistesen, chief Eurozone economist at Pantheon Macroeconomics said in a research note sent to clients.

"Looking at the so far available G7 data shows that Germany even outpaced its peers. It is true that special circumstances, such as the mild winter weather (and hence construction), additionally boosted GDP growth. However, such fault-finding misses the point. Even if the weather god had not been on our side the recovery would have gathered pace. The German economy is in the midst of a regime change towards more domestic demand," was the verdict from Andreas Rees, chief German economist at UniCredit Research.

French construction and telecommunications outfit Bouygues reiterated its full-year guidance, helping to send its stock up by 2%.

Eutelsat shares plunged after the satellite operator cut its 2016 and 2017 profit forecasts, weighing on shares of its rival Inmarsat.

Euro/dollar was 0.25% lower at 1.1349, weighed down by the 'hawkish' Fed rhetoric, while front month Brent crude futures were off by 0.95% to $47.63 per barrel on the ICE.