Dear Reader,

Today's overview of economic news and market action

• Equity markets rebounded on both sides of the Atlantic yesterday …
• Data-wise, US CPI printed slightly above the consensus …
• US futures contracts firmed, providing some modest support for the dollar …
• EUR/USD opens today in the lower half of $1.09-1.10 range …
• GBP/USD is in the $1.27-1.28 corridor …
• EUR/GBP remains between 85-86p …
• Eurozone industrial production data (Jan) are the main highlight today …

The March meeting of the ECB’s Governing Council saw the central bank maintain its key deposit rate at 4%. This outcome was in line with expectations.

World economy grew at a very modest pace in 2023. Subdued growth expected again in 2024, with continuing weak performance by Eurozone in particular. 

Inflation fell sharply last year and further moderation in price pressures anticipated in 2024.

Summer interest cut signalled by European Central Bank

After around two years of aggressive interest rate hikes from the main central banks, monetary policy makers are still on hold and currently deploying a “data-dependent” approach in setting monetary policy. Overall, central banks are waiting for further signs that underlying inflation is on a sustained downward trajectory to give them confidence that it will fall back towards 2% before they will 
contemplate cutting rates. 

Cautious Approach by Central Banks

After around two years of aggressive interest rate hikes from the main central banks, monetary policy makers are currently on hold.