3 Numbers to Watch: DE IFO survey, Texas Manuf, US activity index

The European Central Bank's latest attempt to 'save the currency zone' has once again been hindered by political infighting between member states. One of the requirements of the bond-buying programme announced this month was that both Spain and Italy would need to agree financial bailouts, commiting to tough autsterity measures in return for lower bond yields. With markets already pricing in large purchases by the ECB at the shorter end of the yield curve, the big risk now is that the Spanish and Italian governments will not agree to any organised bailout. So far, Spanish Prime Minister Mariano Rajoy has displayed reluctance towards any programme. As Paul Mason, a BBC journalist, said on Newsnight last week, there is little urgency for the Spanish government to commit to a bailout under the current, rather sound borrowing conditions - with yields on 10-year Spanish debt at around 5.76% today, compared to the near 7% levels experienced during the summer months. However, Spain is playing a dangerous game by testing bondholders' patience and a sharp reversal would hurt Spain's finances, in addition to the ECB's reputation.

Looking ahead to today, three data releases to watch out for are Germany's IFO Business Climate survey, the Dallas Fed's Texas Factory Orders Survey and the Chicago Fed's National Activity Index.

Germany IFO Business Climate Survey (08:00 GMT) Business sentiment in Germany looks set to rebound in September, with the German IFO index expected to rise for the first time in five months. The business climate index, a widely observed early indicator for economic development in Germany, is forecast to increase to 102.5 points in September from 102.3 in August, with a reading of above 100 signalling a positive outlook. The business climate has cooled down considerably in both retailing and wholesaling as a result of the spillover effects from the Eurozone crisis on German consumers and companies, but manufacturing activity has brightened in recent weeks. German manufacturing PMI rose 2.6 points to 47.3 in September, according to data out last Thursday, while purchasing managers on average reported an expansion in services for the first time since June.

Dallas Federal Reserve Manufacturing Survey (14:30 GMT) Manufacturing output in the state of Texas is expected to grow during September, but at a smaller pace than in August, according to business executives surveyed. The production index, a key measure of state manufacturing conditions, fell from 12 to 6.4 last month, suggesting softer output growth. Meanwhile, the general business activity index, which remained negative, but climbed nearly 12 points from -13.2 to -1.6 in August, is forecast to edge higher to -1.4 points. Manufacturing surveys in other regions in the US have been mixed over recent weeks, with the Philadelphia survey showing a pick-up in manufacturing production, but the New York region reporting a contraction in output.

Chicago Federal Reserve National Activity Index (12:30 GMT) The Chicago Fed's National Activity Index, due out today, will gauge overall economic activity in the US and related inflationary pressures during August. Last month, the index showed economic activity improved in production-related areas, from -0.34 in June to -0.13 in July. However, three of the other four broad data catagories - employment, unemployment, and hours; personal consumption and housing; and sales, orders, and inventories - contributed little to growth. Meanwhile, the index's three-month moving average declined slightly from 0.18 to 0.21, reflecting subdued inflationary pressures from the US economy over the last year.

3 Numbers to Watch is published Monday-Friday on TradingFloor.com.  You can choose to be notified whenever a new piece is ready if you become a TradingFloor member - it's free, and you can sign in with Twitter, Facebook, Google or LinkedIn.  You can also follow all the news from our macro team on our Macro Page.