Signs of improvement in the global economy

There are continuing signs of improvement in the global economy, although signs of weakness still linger.

The euro zone's service sector purchasing managers' index fell to 53.1 in June from 53.5 in May, but the Chartered Institute of Purchasing and Supply said its purchasing managers index of activity in the UK services sector rose to 55.8 in June from 55.1 in May.

There was good news in retail. In Europe, euro zone retail sales rose 1.1 pct in May from April while the British Retail Consortium reported that UK like-for-like sales fell by 0.5 percent in June from the same period a year earlier, an improvement on May's 2.4 percent fall and April's 4.7 percent decline. In the US, retail sales are also expected to be good after Wal-Mart raised its forecast for June same-store-sales growth to 4.5 percent from an earlier projection of 2 to 4 percent.

In other news out of the US, the Commerce Department reported that factory orders rose 2.9 percent in May, the biggest gain in 14 months. However, excluding orders for airplanes and other transportation equipment, factory orders fell 0.1 percent in May.

And in Japan today, the Cabinet Office reported that Japan's index of leading economic indicators stood at 40.0 for May, up from a revised 31.8 for April but still below the boom-or-bust line.