The Spanish and Italian May service PMIs are due for release. The Spanish figureincreased to 56.5 in April, which is the highest print since the beginning of 2007. Thisclearly indicates that the domestic economy in Spain is improving. In Italy there ismore 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 thatgrowth was mainly driven by domestic demand and that the weaker-than-expectedgrowth rate was a result of weaker export growth due to the slowdown in the US andChina in Q1.
We expect the US ISM non-manufacturing index to decline to 54.5 after it wasstronger than expected in April. Last month new orders rose and the index providedevidence 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 onFriday. Consensus is for a slightly smaller increase of 210,000 in May compared to220,000 in April, which should likely reflect the recent slowdown in growth. Fedpublishes the Beige book tonight.
Read the full report: FX Daily
Danske Bank