Data abounds as markets await EU summit

A cornucopia of economic data is released today, and with the EU summit still a few days away despite an awful lot of noise each and every day as detailed in our Morning FX Update, let us dive straight into the numbers instead.



initial Jobless Claims struggling at 400,000 mark: The sad thing about the state of the U.S. labour market is that 400,000 Initial Jobless Claims is only consistent with mild jobs growth, which is unlikely to see the unemployment rate head south, but on the plus side we are finally moving a bit lower again after six tough months where August was the only bright spot (relatively speaking). The four-week moving average is down to 408,000 after a September peak of 422,300 and the average has declined three months in a row. Last week's 404,000 print followed an upward revised 405,000 print the week earlier and consensus looks for another decrease in initial claims to 400,000 today.



Leading Indicators still pointing up in the US: Unlike the private competitor ECRI, which used proprietary series for its index of leading indicators and which has just recently declared a U.S. recession a near certainty, the Conference Board's Leading Indicators Index continues to grow albeit at a reasonable rate of 6.5 percent. The growth in the index has been fairly consistent around 6 percent in the last twelve months and is supported by the fact money supply and the yield spread are included, both of which have contributed sizeably in recent months. The surge in the money supply (M2) has eased recently, however, and should not make as big a contribution to the September report. Consensus looks for 0.2 percent in September down from 0.3 percent a month earlier.



Philadelphia Fed Business Outlook still deeply in the red: ISM Manufacturing has surprised to the upside lately as consensus has generally relied too much on the string of weak regional Fed reports. One such weak regional Fed report is the Philadelphia Fed Business Outlook, which has been negative in three of the last four months and consensus looks for another poor print of -9.6 in today's October release. New Orders moderated to -11.3 in September from -26.8 a month earlier but still point to weakness ahead.



Existing Home Sales to decline? A couple of better than expected numbers from the housing market this week do not imply that all is well, but do suggest that the sector is slowly normalising after the housing binge-turned-crash in the Noughties. Existing Home Sales, which do not impact GDP materially, unlike sales of new homes, are expected by consensus to decline 2.5 percent to 4.91 million in September following the 7.7 percent increase in August (5.03mln). Regional numbers, however, could suggest an even bigger decline around 5 percent.



Eurozone Consumer Confidence to deterioate further: Ahead of the string of U.S. data we have U.K. Retail Sales (+0.2 pct. expected) and Eurozone confidence, which is expected to drop to -20 in October from -19.1. Not surprisingly given the debt concerns confidence has dropped sharly in the autumn months after having averaged -10 in the preceeding year.