Daily Economic Outlook: 4th November 2015

Fed-Vice chair Fischer's lecture early tomorrow morning is likely to include his perspective on the policy outlook. The U.S. October employment data released on Friday was observed as a key input into the FOMC's deliberations about whether to raise the policy rate at its December meeting, today's October ADP report will be scrutinised for signs that, despite relatively soft August and September employment gains, US labour market growth remains robust, argues Lloyds Bank. Markets will also be keeping an eye on the testimony of Fed Chair Yellen as well as speeches by other Committee members Brainard, Harker and Dudley. However, none are scheduled to cover monetary policy.

Today's domestic calendar of U.K is dominated by the corresponding services PMI ahead of tomorrow's BoE policy announcement and Inflation Report. The headline services index, and most of its underlying components, softened sharply throughout Q3 on the back of global growth fears. 

Nonetheless, its 53.3 September reading remained consistent with a solid pace of activity and the relatively strong employment balance suggested that firms remained upbeat about medium-term prospects. The October print from our Business Confidence Barometer, which tends to lead the services PMI, points to a rebound in today's release and we have pencilled in a 54.0 outturn.

The manufacturing PMI of  euro area and ISM indices of United States indicated to firmer-than-anticipated activity, although the surprises were far more modest than in the UK. Today's final October euro area services PMI is anticipated to remain unchanged at 54.2, while a 0.1 point rise is seen in the non-manufacturing ISM to 57.0, says Lloyds Bank.