Daily Economic Outlook—Jan 22, 2016

The upcoming release of flash PMI readings for Germany, France and the euro area will give an idea regarding the strength of economic growth for the initial weeks of 2016. The PMI data indicates that economic growth for the euro area was fairly well in Q4 2015 and just a moderate further slowdown is expected in January. The movement of manufacturing activity, mainly in Germany, might give an insight regarding the extent of the impact of China's slowdown on global trade.

The December UK retail sales data is due to be released today. In November, UK sales had increased sharply due to the Black Friday discounts. However, there is a possibility that the retail sales figure for December might decline. Meanwhile, the UK public sector borrowing data is also due to be released today. According to the data for the current financial year to date, the November's Autumn Statement forecast for the 2015/2016 public sector borrowing was overly positive. The December's public sector finance data are likely to support this view.

Meanwhile, the December US existing home sales are projected to post a big amount. The manufacturing sector in the nation is under pressure. Therefore, the economic growth is mainly expected to be driven by other sectors.