Dear Reader,

Today's overview of economic news and market action

• Generally uneventful day on markets yesterday
• Macro diary was very quiet
• Dollar traded modestly higher, recovering some ground
• EUR/USD edged back towards the midpoint of $1.11-1.12
• EUR/GBP continued to trade within the 83-84p band
• Today’s macro diary is busier
• It includes EZ money supply data (Aug) and final reading of US Q2 GDP

All rates quoted are indicative market rates.

ECB cuts as expected, but vague guidance on rate outlook

The ECB cut interest rates for a second time this year at the September policy setting meeting of its Governing Council. The Deposit rate was lowered to 3.50%. Meanwhile, the refi rate was cut to 3.65%, which entailed a previously announced technical adjustment of a reduction in the spread between the Depo and Refi rates from 50bps to 15bps. 

The September meeting of the Bank of England’s Monetary Policy Committee (MPC) saw the central bank leave the Bank rate at 5.00%. This follows a 25bps cut implemented at its previous meeting in early August. The decision to cut in August represented the first rate change from the Bank of England in eight meetings.

The September meeting of the US Federal Reserve Open Market Committee (FOMC) saw the central bank cut interest rates for the first time since 2020. The target range for the Fed funds rate was reduced by 50bps to 4.75-5.00%. It marks the first rate change from the Fed in nine meetings.