Service Sector Purchasing Manager Survey Results Announced

May 6, 2015

The dollar fell 0.3% against the euro and loonie and 0.2% relative to sterling but is unchanged relative to the yen and yuan.  A 0.9% advance against the New Zealand dollar contrasts with a 0.7% drop relative to the Australian dollar.

Asian stock markets are showing red on the screens, with drops of 2.6% in India, 2.3% in Australia, 1.0% in China and 1.3% in South Korea.

Japan’s Golden Week wound up with today’s observance of Constitution Day.

European stock markets are showing green for the most part, with advances of 0.9% in Germany and Italy, 0.8% in Spain, 0.6% in France and 0.3% in Britain.

The 10-year German bund climbed another two basis points to 0.53%, and futures indicate a likely uptick in the 10-year Treasury to 2.20% at the open.

Oil surged 2.3% to $61.78 per barrel.  Gold is 0.3% softer at $1,189.79 per troy ounce.

Two central banks made interest rate announcements.

  • The surprise was sprung by the National Bank of Romania, whose main interest rate was cut by 25 basis points to 1.75%.  That was the fourth such drop so far in 2015.
  • The Central Bank of Poland as expected left its main interest rate unchanged at 1.50%.  Such was cut by 50 bps each in January and March 2015.

Final data resulted in upward revisions to Euroland’s services and composite purchasing manager indices.  The services PMI was revised to 54.1 from an initial estimate of 53.7 and a March reading of 54.2.  Such previously rose from 51.1 last November to 53.7 in February.  Spain posted a 101-month high of 60.3, while Ireland’s reading of 60.6 was the group’s best score but at a 14-month low.  Italy’s services PMI of 53.1 was 1.5 points higher than in March and at a 10-month high.  The German and French service PMIs were at 3-month lows of 54.0 and 51.4. 

The eurozone composite PMI was 53.9, 0.1 point less than in March but suggesting underlying GDP growth of 0.4% at the start of the second quarter.  The Spanish and Italian composite scores were at 101- and 10-month highs.  The Irish, French and German readings were at 10-, 3- and 2-month lows.  All results were above the 50 no change threshold.

China’s HSBC-compiled services PMI rose 0.6 points to a 4-month high of 52.9 in April on strengthening new business growth.  The companion composite PMI for China slid 0.5 points, however, to a 3-month low of 51.3.

Hong Kong’s manufacturing PMI fell to a 6-month low of 48.6 and was the third sub-50 score in four months.

India’s composite PMI of 52.5 was at a 6-month low and 0.7 points lower than in March.  Inflation was historically low, suggesting another Reserve Bank of India interest rate cut before too much longer.  The Indian services PMI eased to a 3-month low of 52.4.

The British purchasing managers index for services printed at an 8-month high of 59.5 in April, up from 58.9 in March and 56.7 in February.  The U.K. composite PMI improved to 58.4 from 55.3 at the end of 2014.

Sweden’s services PMI slumped unexpectedly sharply to 53.9 last month from 57.2 in March.

South Africa’s private PMI edged 0.1 point lower to a 2-month low of 51.5 in April.

The Lebanese private PMI stayed below the 50 no-change threshold but at 49.0 in April was at a 3-month high.

Australian retail sales grew 0.3% in March, less than gains of 0.5% in January and 0.7% in February.  New home sales in Australia jumped 4.4% in March, a 13-month high.

First-quarter New Zealand labor statistics were reported.  A jobless rate of 5.8% was unchanged from 4Q and above expectations.  Employment advanced 0.7% on quarter and 3.2% on year, and such was accompanied by a record high participation rate of 69.6%.  Average hourly earnings excluding overtime went up 0.3% on quarter and by 1.8% on year.

Retail sales in the eurozone fell 0.8% in March, which cut the 12-month increase to 1.6% from 2.8% in both January and February.  Sales rose 0.7% last quarter.

Portuguese unemployment crested to 13.7% last quarter but slid in Greece to a 2-1/2 year low of 25.4% in February.  Retail sales in the year to March went up 5.1% in Hungary and 8.8% in the Czech Republic.

ADP estimates that private-sector jobs in the United States grew last month by a less-than-anticipated 169K.  The figure for March was revised downward.  U.S. nonfarm productivity and unit labor costs arrive today as well as does Canada’s IVEY-PMI index.

Copyright 2015, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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