Ahead of Thursday’s ECB Policy announcement, this mornings release of euro area producer price inflation data for October is likely to face heavy market scrutiny. Following last weeks drop in headline annual CPI inflation to 0.3% in the euro area, the producer prices data will provide some insight into price pressures earlier in the pipeline.
In the UK, construction PMI will be the main focus. While the correlation between the PMI and official measures of output has been less than close in recent quarters, the headline activity measure has remained at levels consistent with rapid growth in the sector.
In the US the focus will be on construction. The drop in September construction spending, concluded a disappointing quarter for the sector. Some of this may be in reaction to a very strong Q2 and markets expect spending to have stabilised in October. Markets are forecasting a 0.8% rise.
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