Daily Economic Outlook: 10 April, 2015

UK industrial production for February (0830 GMT) will provide the key domestic highlight. After picking up in the year to 2013Q4, industrial output has subsequently been broadly flat as gains in manufacturing have been offset by softening activity in the volatile mining and utilities sectors. However, manufacturing output surprised on the downside in January with a -0.5%m/m print which pulled overall production down by 0.1%. Subsequent survey-based CBI and PMI data for February point to a rebound in activity and lead us to pencil in 0.2% and 0.1% m/m prints for manufacturing and industrial production respectively.  

UK construction output (0830 GMT) for February is also published this morning. Activity began the year with a 2.6% m/m plunge following a revised 2.2% contraction in Q4. This weakness, which was led by a drop in house building, contrasts strongly with other survey-based indicators from the Bank of England Agents and PMIs and may reflect difficulties in seasonally adjusting a very volatile monthly series which only began in 2010. 

"We expect today's release to show a 3.0% rise on the month, which is a little stronger than the market consensus", says Lloyds Bank. 

The minutes of the March FOMC meeting, released on Wednesday, proved to be more balanced than expected following the policy statement and accompanying comments of Fed Chair Yellen. In particular, the minutes revealed that several FOMC members favoured a June hike in the policy rate and only two wanted to wait until 2016. Against the backdrop of last week's disappointing March payrolls report, markets will be looking at speeches from Fed Presidents Lacker and Kocherlakota for steers on the Fed's current thinking.