Daily Economic Outlook: 15th October, 2015

Both the Philly Fed and Empire manufacturing surveys are expected to show improvements in October. Yet, any rises should be seen in the context of current weak sentiment levels, with the sector impacted by softer external demand and past rises in the US dollar. 

Prospects for a US interest rate rise this year hinge, to a significant extent, on whether the health of the domestic economy offsets external weakness. Yesterday's retail sales figures for September were unexpectedly weak and today's weekly initial jobless claims are forecast to edge back up to 270k, after the fall to 263k in the prior week. The September headline CPI inflation is also forecast to fall back into negative territory at -0.1%y/y, says Lloyds Bank.

With little on the UK and eurozone calendars of note, with the exception of some ECB speakers, attention will be on the US today. The main focus will likely be the release of the Philadelphia Fed and Empire surveys for October, as well as New York Fed President Dudley's speech at 15:30BST on the Fed's policy reaction function. 

In light of recent comments from Brainard and Tarullo (both of whom are permanent voters) that appeared to be more dovish than Fed Chair Yellen, markets will be examining closely whether Dudley will shift his rhetoric away from his expectation of liftoff in 2015.