Majority of the investors had their eyes on the US ISM non-manufacturing PMI, which did not disappoint and the results came out better that expected with the non-manufacturing purchasing index rising to 58.6 in May, from 56.8 in the previous month. In other words, the reading above 50 for the index indicates an expansion in the sector and reading below 50 indicates a contraction, therefore there is an optimistic view of the business condition and overall US economy. In addition, US job openings rose in April, increasing to a seasonally adjusted 6.7 million, which is seen as the highest level since December 2000.
Regarding the Euro zone, services PMI was expected and the results have shown that there is a continuation of slowing activity in the previous month again, where the growth pace slowed down from the turn of the year and inflation pressure also eased in May. The 1.9% inflation is within the ECBs; target and it may allow the central bank to ease the current monetary policy. However, the political uncertainty within the Eurozone and the economic indicators coming with results lower than expected have influenced the optimistic forecast from the beginning of 2018 to turn to a darkened outlook. The services PMI fell to 53.8 from 54.7, which is the lowest reading since the start of 2017.
On the other hand, the UK service sector picked up in the last 3 months, where the PMI rose to 54.0 in May from 52.8 in April, signaling an upturn in the business activity within the service economy. According to Chris Williamson, chief business economist at survey complier Markit, the improvement in the service sector activity is evidently showing that the economy is on the good course and has potential to recover in the second quarter, however the earlier manufacturing and construction surveys are still rising a question of the overall outlook of the economy.
Today we are not expecting a lot of locomotion in the financial markets as the most important news is coming later on today with the Canadian trade balance and building permits. The European trading session is expected to be rather calm.
ECONOMIC CALENDAR EVENTS FOR JUNE 6th
GBP MPC Member Tenreyro Speaks
CAD Trade Balance
CAD Building Permits m/m
