3 Numbers to Watch: DE Manu PMI, UK Retail Sales & US Philly Fed

After the European Central Bank’s bond-buying plan was revealed and the Federal Reserve’s made its QEinfinity announcement this month, it was the Bank of Japan’s turn on Thursday to turn on the printing press. The Japanese central bank expanded its asset buying programme by 10 trillion yen (USD 23 billion) and scrapped a requirement for banks to make regular purchases of government debt. This has left an air of inevitability around the Bank of England’s Monetary Policy Committee meeting on October 3 and 4. Minutes from the Bank’s last meeting published yesterday further raised hopes of another round of QE, after it revealed that some members believed more stimulus would soon be needed.

In the meantime, we have a range of big economic data releases to go through today. Manufacturing PMI in Germany, UK retail sales and the US Philadelphia business conditions index are only a few numbers to watch out for, in what is expected to be an action-packed day.

German Manufacturing PMI (07:30 GMT) German manufacturing output is expected to rise for a second consecutive month in September as the downturn in the manufacturing sector bottoms. The PMI index is forecast to rise to 45.2 for the month, from 44.7 in August, according to a consensus of analysts, although this is still below the neutral value, pointing to an overall deterioration in business conditions. The rebound is likely to be short-lived, however, as production for intermediate goods remains weak. Survey respondents in August said weakness in new business inflows from Southern Europe was the reason for lower production levels. The uptick in Manufacturing PMI follows yesterday’s strong ZEW survey data, which saw the investor confidence index rise to -18.2 from -25.5 for September.

UK Retail Sales (08:30 GMT) Retailers in the UK will be hoping to recover from the 'Olympic effect', which saw sales for food and services contract by 0.4 percent in July, the worst sales growth this year. While there was a mild boost to food sales in the form of party food and drink, the net effect of the Olympics was minimal as lower footfall in London was offset by a better performance in the rest of the country. Data from the British Retail Consortium, due out today, is likely to confirm this trend. Meanwhile, retail sales excluding automotive fuel is expected to contract by 0.3% for August, from growth of 0.3% in July.  

 Philadelphia Federal Reserve Business Outlook (14:00 GMT) The Philly Fed diffusion index is expected to show an improvement in overall business conditions for manufacturers in the third Federal Reserve district during September. The index increased 6 points to a reading of ‐7.1 in August. However, the survey’s broadest measure of manufacturing conditions is expected to rise to -3.3 in September. This contrasts with the Empire State Manufacturing survey, where the general business index slipped five points to -10.4. Manufacturing growth in the US has been sluggish over the last three months amid falling exports and weak employment. The ISM manufacturing index registered at 49.6 percent, a decrease of 0.2 percentage point from July's reading of 49.8 percent.