DAVY VIEW

This morning’s Irish Services PMI at 51.9 in July is clearly a big improvement on 39.7 in June but lags behind yesterday’s euro area (54.7) and UK (56.5) readings. This indicates a modest pace of expansion in July but jars against the enormous 37% fall in unemployment claimants last month following the third phase of the Irish government’s re-opening plan on June 29th. Hence, the Services PMI probably understates the actual rebound in activity.