Daily Economic Outlook: 6th October, 2015

It is a very quiet day for data with US international trade for August the only release of note.  Already available statistics for international trade in goods show that the visible trade deficit expanded sharply in August, due to both a fall in exports and rise in imports.

Trade in services is unlikely to change the picture significantly and so the overall trade deficit should also have risen significantly. While this monthly data can be very volatile, the September figures may be interpreted as further evidence of the negative impact on the US economy from the slowdown in China and weakness in global trade, says Lloyds Bank. Certainly it seems that exports will make a smaller contribution to Q3 GDP growth than was the case in Q2.    

Central bank speakers may provide updates on the potential impact of recent economic data on monetary policy in the euro area and the US. The title of ECB President Draghi's speech suggests that he is unlikely to say anything about monetary policy today.

However, the response of FOMC participants Esther George and John Williams to Friday's much weaker than expected employment report will be of interest. George's views are well known to be hawkish, so she will probably still favour an early interest rate hike. Williams in speeches over the past few weeks has suggested that he also favoured a move before year end. So it will be interesting to see if he now tempers this view.  
 
The outcome of the latest BoJ meeting, due early Wednesday morning, will also be eagerly awaited by markets. Weak economic data in Japan has boosted expectations that the Bank will soon announce further stimulus measures, added Lloyds Bank.

Despite this policy makers have seemingly played down the chances of an early move. Even, however, in the likely event of no policy change at this stage, BoJ Governor Kuroda's comments will be listened to closely for any hints of future action.