Daily Economic OUtlook: 16th October 2015

Notwithstanding yesterday's stronger-than-expected US CPI data, anxiety about global disinflationary trends puts the spotlight on this morning's final estimate of Eurozone inflation in September. Having dipped back into deflation on the preliminary estimate with a -0.1% y/y reading, no change is expected on the final gauge, despite a modest upgrade of Spanish inflation trends from their first print.

The likelihood of a very shallow uptrend in price pressure forms the backdrop for next week's ECB policy meeting, as market expectations harden that some extension of the ECB's QE programme will eventually come to pass. Elsewhere, comments from BoJ's Kuroda and MPC's Forbes will also be scrutinised for monetary policy leanings.

"In the afternoon, U.S. data should continue to have at least some bearing on expectations of when, or whether, the Federal Reserve will move to a tightening of monetary policy. Today's second-tier releases are likely to contrast. The expected weakness in manufacturing output in September would be seen as reflecting the strength of the dollar and anxieties about external demand, but by themselves do not feed into official estimates of GDP", says Lloyds Bank. 

Meanwhile, a solid outturn for JOLTS job openings in August would mitigate the impression of weakness seen in the September employment report, but is less timely. Most forward-looking would be the preliminary reading of the University of Michigan consumer sentiment, expected to rise modestly. But the expected improvement would still leave sentiment shy of the highs reached earlier this year.