Dear Reader,

Today's overview of economic news and market action:

• Cautious tone to investor sentiment for much of last week
• On the currency front, the dollar was holding a softer tone
• At the same time, sterling had some upward momentum
• EUR/USD starts this week back up near the midpoint of $1.07-1.08
• GBP/USD opens in the upper half of $1.25-1.26
• EUR/GBP is operating below the 86p mark
• Packed macro diary this week
• Fed and ECB policy meetings take place
• Data-wise, some of highlights include US CPI and UK GDP

Growth in services activity remains marked

Ongoing demand strength continued to support sustained growth in the Irish service sector during May, according to the latest AIB PMI® survey data. Activity and new business both rose sharply, albeit at rates slightly weaker than seen in April, and business sentiment strengthened on the month.

The Full Picture

The scale of Irish contract manufacturing, whereby a company based in Ireland engages a firm abroad to manufacture products on its behalf, has grown enormously since 2015.

Inflation in Retreat

Inflation is clearly on the wane in Ireland, in line with the trend in most other economies. Preliminary data for May show that prices rose by 0.3% in the month, with the annual rate of HICP inflation falling to 5.4%.