US data in focus this week to gauge timing of Fed rate hike

Data from the US this week will be eagerly awaited by those looking to gauge the appetite of the Federal Reserve to raise rates before next year.

September inflation data, out on Thursday, are expected to show US consumer prices falling back into deflationary territory. Pump prices are estimated to have fallen 9 per cent in September, pushing the headline inflation rate down to minus 0.1 per cent year on year. Producer prices for September, on Wednesday, are expected to remain negative, down 0.8 per cent year on year.

US activity indicators this week include retail sales for September, also on Wednesday, and industrial production on Friday. Retail sales are likely to have been pushed down by falling petrol, but boosted by car sales, which remain above pre-crisis levels, leading analysts to expect a gain of 0.2 per cent in retail sales over August.

Industrial production has been slowing throughout 2015. Annual growth at the start of the year was close to 4 per cent, but data for August showed growth of just over 1 per cent. This trend is expected to continue, with headline industrial production falling 0.3 per cent from August and the manufacturing figure (which strips out the effects of oil producers) down 0.2 per cent.

September inflation data for the UK are also out this week. The headline rate fell back to zero year on year in August and core inflation dropped to 1 per cent. Little change is expected in September data on Tuesday, with the headline CPI remaining at zero year on year.

UK labour market data for the three months to August are out on Wednesday. For the previous period the unemployment rate dropped to 5.5 per cent and earnings growth moved to 2.9 per cent year on year. The latest data are expected to show the jobless rate remaining firm while earnings growth, excluding bonuses, is expected to accelerate to 3 per cent year on year.

Chinese trade data for September on Tuesday are expected to show worse declines, with export growth falling from minus 5.5 per cent in August to minus 6 per cent, and import growth from minus 14 to minus 16 per cent.

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