Daily Economic Outlook: 11th August, 2015

The August German ZEW survey is set to dominate the news flow this morning. After a sharp pickup between 2014Q4 and 2015Q1, the forward-looking expectations measure, which tends to lead euro-area GDP by around three quarters, has subsequently retraced a little on the back of accumulating Grexit worries. However, with such concerns fading somewhat over the last month, a small rebound from 29.7 in July to 32.0 is expected, says Lloyds Bank.  

Despite signs that the momentum in global activity has eased a little in recent months, the corresponding run of US data prints, including last week's payrolls report, have continued to chime with the Fed raising the policy rate in September. Today's US releases, which include the July NFIB index of small business sentiment, preliminary Q2 nonfarm productivity and unit labour costs and June wholesale inventories, are not expected to alter the broad picture of a solid growth outlook and moderate pickup in inflation.

According to Lloyds Bank, "Worries over Chinese growth prospects, along with a potential rise in Iranian oil supply in 2016H2, have served to push Brent crude below $50/bbl over the last week. Against this backdrop, today's OPEC and US Department of Energy assessments of the prospects for crude oil will be closely watched for shifts in their near-term market forecasts."