Services sector in Italy kept sliding in May, while data from Spain showed a slower contraction

Italys services sector registered a faster rate of shrinkage during May. According to reports by Markit/ADACI, the indicator, which tracks activity (orders and purchases) among managers of companies, operating in the sector of services unexpectedly declined to 46.5 in May from 47.0 in April. Experts predicted a rise to 47.5. Services PMI in Italy remained still below 50.0 level, that divides contraction from expansion in activity. A significant drop was recorded in new orders indicator, which weighed the most on the final results. Business confidence, regarding future development in this sector, also declined. Suppliers of services reduced the number of their employees for 24th consecutive month in May, while service expenditures decreased as well.

Meanwhile, Spanish services sector managed to contract at a lesser rate during May, with new orders and employment indicators recorded a slower pace of decline. Markit Economics reported that Services PMI in Spain increased to a value of 47.3 in May from 44.4 in April. The index remained below 50.0 level for 23rd consecutive month, marking contraction, but the rate of decrease was the smallest during that period. Activity shrinkage was the result of ongoing economic crisis and the uncertainty, tightly related to it. In May new orders indicator diminished at a slower rate, while employment indicator was considerably lower. The rate of decrease, however, slowed down for the third month in a row.

After the release of these indicators, EUR/USD pair remained below 1.3100 level, but relatively stable at 1.3074-1.3077.