Dear Reader,

Today's overview of economic news and market action

• Positive tone to investor sentiment last week
• Firming in market rate expectations, with less rate cuts priced in
• Occurred amid positive macro news and hawkish central bank remarks
• Currency-wise, action was confined to fairly narrow ranges
• Although, euro and sterling did post modest gains versus dollar
• Ahead this week, some key inflation numbers from EZ and US

Ireland’s Jobs Market in Good Shape 

Ireland’s latest labour force survey (LFS) paints a rosey picture of the economy at the end of 2023. Job creation continued to be broad-based, with annual growth in the majority of sectors, led by Education (+12%), Agriculture (+9%), Other Activities (+8%) and Accommodation and Food (+7%). 

Service sector growth slows to near-three year low

The first batch of AIB PMI® survey data for 2024 signalled a loss of momentum in Irish service sector activity, albeit still extending the current growth sequence that began in March 2021. Rates of expansion in total activity and new business both slowed on the month, with the former rising at the weakest pace in the current upturn.

ECB on hold for third straight meeting

The first policy setting meeting of the ECB’s Governing Council for 2024 saw the Central Bank maintain its key deposit rate at 4%.

The UK economy stuck in stagnation

A plethora of UK data last week provided conflicting evidence on the strength of the economy of late. For the optimists, continuing strength in the labour market and solid retail sales figures for January suggest the UK consumer is recovering some momentum. However, sticky inflation and moribund GDP growth point to a wider malaise in the UK economy.