With little on the European calendar of note, attention yesterday solely turned to the world’s largest economy; the US. The main focus surrounded the release of the Philadelphia Fed and Empire surveys for October. In light of recent comments from two FOMC members (Brainard and Tarullo) that appeared to be more dovish than Fed Chair Yellen, US data continues to be heavily scrutinised.
The Philly Fed manufacturing index was released yesterday and economist’s predicted this improvement on September’s reading. The Philly Fed posted a worse than expected -4.5 against an expected -1.8. The current weak sentiment levels have continued, with the sector impacted by softer external demand and past rises in the Greenback. 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.
The University of Michigan Consumer Sentiment will dominate today’s headlines. Last month’s reading plunged to its lowest reading in a year, suggesting moderate growth, mild inflation and a dampening in optimism for the future. Eurozone CPI is released in the morning, as we gain an insight into the struggling economy’s inflation.