The final estimate of the euro-area services PMI in May should inch upwards to 53.4 from the flash estimate of 53.3. Moreover, the final composite PMI is likely to confirm the flash estimate of 53.4. The improvement in PMIs observed since last autumn stems mostly from the services sector rather than the manufacturing sector. This is because household consumption, responding to the positives of a lower oil price and weaker euro, has been highly supportive of services activities.“Looking at the regional breakdown, both the Spanish and Italian services PMI is expected to drop in May. In Spain, a fall from 60.3 in April to 58.8 in May stems from the fall in the expectations component. In turn, this could be driven by not only the recent rebound in oil prices but also uncertainty surrounding the elections”, expects Societe Generale. In Italy, the fall from 53.1 to 51.9 should mirror the results of business surveys and confidence indicators in May. The service PMIs for Germany and France should remain stable from the flash estimate at 53.0 and 53.4 respectively.
The material has been provided by InstaForex Company – www.instaforex.com