The US ISM services survey expected to remain resilient. Italian and Spain PMI forecasted to go above 50| FXMAG.COM

Services PMIs – 05/04 – one notable trend in recent months has been an improvement in the services sector, despite trends in rising prices.

France could well see a slowdown given the recent social unrest

While manufacturing has been struggling and is in large part contracting, services activity has been picking up across the board, whether it be in the US, Europe or the UK. While energy prices have been falling, notably petrol prices, as well as that of natural gas consumers have had more disposable income than expected. This has had the effect of exerting upward pressure on services inflation which is prompting concerns over stickier than expected prices. As we come to the end of Q1 the latest March services numbers are expected to point to economic activity that has seen a significant pick up since the end of last year, although France could well see a slowdown given the recent social unrest. In February France services PMI came in at 55.5, and it will be hard to see a repeat of that. Germany has been improving but again could see a slowdown from 53.9, while in the UK this is expected to slow to 52.8. Italy and Spain are also expected to come in above 50, while in the US the latest ISM services survey is expected to remain resilient, slowing to 54.5 from 55.1.