Daily Economic Outlook- Lloyds Bank

Views from Lloyds Bank

• The domestic focus for the day will come from official estimates of UK construction output in January. 
  
  
• Despite an estimated 2.1% contraction in activity in 2014 Q4, the more solid tone of recent survey-based indicators such as the PMI and BoE Agents' scores points to a firmer near-term outlook. As such, for January we look for some acceleration from December's anaemic 0.4% gain, with output rising by 1.5% on the month. 
  
  
• With further modest gains expected over the remainder of the quarter, construction seems likely to contribute positively to overall output growth in Q1. Comments from the MPC's Shafik and Haldane may also provide some domestic policy context.
  
  
• Internationally, the University of Michigan consumer sentiment reportfor March is likely to be the key focus. In addition to a modest firming ofheadline sentiment, inflation expectations gauges will be of interest, withreadings stable around recent outturns likely to add to the Fed's confidencethat low inflation outturns are not unmooring expectations.
  
  
• Finally, US PPI data for February are expected to show a modest firmingon the month, reflecting the higher level of oil prices relative to January.
  
  
• The morning's IEA's monthly oil market report, however, may add torecent bearish crude sentiment should it not point to expected cutbacksin US oil supply.