Today is PMI day with both the euro area and the US releasing Flash PMI forMay.
In the euro area we look for a further small increase as the recovery graduallystrengthens. Yesterday euro consumer confidence hit a new seven-year high. Someindicators have softened a bit recently (ZEW, OECD leading indicator), which mayindicate some downside risk, but overall PMI should still indicate quarterly GDPgrowth in the 0.4-0.5% area.
In the US we look for a broadly flat reading for Markit PMI at 55.5 (prev 55.4). USjobless claims will also be interesting after they hit a new cycle low last week,indicating a strengthening labour market.
Finally, US existing home sales should show an increase as pending home salespicked up last month, which may be a sign of a bottoming in the US housingslowdown following the sharp rise in mortgage rates last year. Mortgage rates havecome down again and this should soon feed into a new recovery in US housing asmay already be indicated by strong housing permits last month.
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Danske Bank