Daily Economic Outlook: 1st October 2015

The UK manufacturing PMI and US ISM manufacturing surveys are the main data focus today, ahead of tomorrow's US employment report. The trade-weighted sterling exchange rate has eased back in recent weeks, but it may provide little relief for UK exporters given the more significant appreciation of the past two years. Indeed, the CBI industrial trends survey reported a further weakening of export demand in September. 

"Overall, we look for a further dip in the UK manufacturing PMI to 51.0 from 51.5 in August. The Eurozone manufacturing PMIs are expected to confirm their earlier preliminary estimates", says Lloyds Bank.

The story is similar for the US ISM manufacturing survey, with export orders affected by the rise in the trade-weighted dollar, in contrast to more buoyant domestic data. Downside risks to the forecasts for the ISM have increased, following the release of other surveys for September which have been on the weak side of expectations. 

Fed speakers this evening include the Atlanta Fed's Lockhart and the San Francisco Fed's Williams, both centrists on the Committee whose comments will be watched for any shift in their expectations of liftoff this year.