Daily Economic Outlook: 28th September, 2015

Concerns about the Chinese economy and speculation over when the Fed will begin to raise interest rates are likely to continue to be the dominant issues for markets. The key Chinese data will come later in the week but today will see both US data and some Fed speakers that could impact on interest rate expectations. 

Last week several FOMC participants including Fed Chair Yellen suggested that a 2015 policy rate increase remained on the cards. Today should see a wider range of views. Of particular interest will be the comments of New York Fed President Dudley. He is regarded as having 'centrist' views but is also seen as being one of the Committee members who is most influenced by financial market fluctuations.

Today's US economic data includes the August personal expenditure deflator, the Fed's preferred measure of inflation. Already released data for the August CPI suggests that headline PCE inflation will remain very low at 0.3%, with 'core' inflation somewhat higher but still below the Fed's target at 1.2%. 

"Consumer spending data for August are expected to confirm that this sector remains the main driver of GDP growth in Q3. Meanwhile, pending home sales will provide a further update on the housing market", says Lloyds Bank.

It is a quiet start to the week elsewhere. A speech by BoE MPC member Kristin Forbes is set to focus on the sizeable UK current account deficit. She may address the issue of whether that represents a threat to sterling.