The UK services-sector PMI index was revised marginally higher to 55.2 from the flash reading of 55.1. There was no impact on Sterling with markets waiting for further evidence on the domestic inflation outlook and bank of England response. Global equities struggled to make further headway which also limited potential Sterling support in global markets. BRC data recorded an annual increase in like-for-like sales of 3.7% in the year to May from 5.2% previously which implied a further decline in volumes terms.
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The Euro-Zone PMI services-sector index was revised down to 55.1 from the flash reading of 55.9. The Sentix Euro-Zone consumer confidence index dipped to –17.0 for June from –13.1 previously and weaker than expectations of –15.2. According to Sentix, there are particular concerns surrounding Germany which has dragged the overall Euro-Zone economy weaker. The Euro remained under pressure after the European open and retreated. Bundesbank head Nagel stated that several more rate hikes are necessary. ECB President Lagarde stated that there was no clear evidence that underlying inflation has peaked while wage pressures have strengthened further.
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10.00 Retail Sales (YoY) (Apr) Exp. -3% Prev. -3.8%
The ISM non-manufacturing index retreated to a 5-month low of 50.3 for May from 51.9 previously and below consensus forecasts of 52.5. There was a limited slowdown in new orders growth and steeper slowdown in new orders while order backlogs contracted at a faster rate. There was a small decline in employment on the month while prices increased at a slower rate on the month. The prices index retreated to 56.2 from 59.6 previously and the lowest reading since June 2020. According to the ISM, the headline figure would be equivalent to GDP growth of around 0.2%. The data triggered fresh speculation over an economic slowdown and a potential dip towards recession given that the manufacturing sector remains firmly in contraction territory.
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