Market movers today
The Spanish and Italian May service PMIs are due for release. The Spanish figure increased to 56.5 in April, which is the highest print since the beginning of 2007. This clearly indicates that the domestic economy in Spain is improving. In Italy there is more room for improvement as the figure was 51.1 in April.
In the euro area the GDP components for Q1 are due for release. We expect that growth was mainly driven by domestic demand and that the weaker-than-expected growth rate was a result of weaker export growth due to the slowdown in the US and China in Q1.
We expect the US ISM non-manufacturing index to decline to 54.5 after it was stronger than expected in April. Last month new orders rose and the index provided evidence of a rebound in Q2. This followed although the employment component fell, as it tends to lag orders.
The US ADP employment is also released ahead of the non-farm payrolls due on Friday. Consensus is for a slightly smaller increase of 210,000 in May compared to 220,000 in April, which should likely reflect the recent slowdown in growth. Fed publishes the Beige book tonight.
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