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Let's give service sector sentiment a try

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  • After the ISM's triple play on manufacturing sector sentiment on Monday, today it is the turn of service sector sentiment. For economists, there is a question of whether sentiment indicators today rare really indicating sentiment, or what participants think they ought to feel.
  • In the Euro area the consensus is for a modest acceleration of economic activity, although French numbers are expected to signal contraction. Euro area GDP is also due, though not likely to be too interesting.
  • The US ISM will doubtless do their best to publish sentiment figures just once today. We are looking for a consensus 55.5, consistent with the ongoing recovery post the weather impacted first quarter. Unit labour costs from the first quarter are also likely to be pushed up by weather effects.
  • Australian first quarter GDP was stronger than expected, led by the export of basic resources. This puts the hype about Asian and Chinese demand weakness at the start of this year into context, although Australia has been raising market share in export markets too.

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