Dear Reader,

Today's overview of economic news and market action:

• • Cautious tone to market sentiment yesterday
  • Reflected in modest falls on most of the main equity indices
  • Data-wise, the macro updates tended to disappoint versus expectations
  • Currency-wise, the dollar was holding the upper hand
  • Euro, sterling and the yen lost ground to the greenback 
  • EUR/USD trading nearer to $1.07, GBP/USD below $1.26
  • Relatively quiet macro data calendar today
  • BoE Governor Bailey is appearing at Treasury Select Committee

AIB Ireland Services PMI - August

Strong growth in the Irish service sector was sustained during August with the latest AIB PMI® survey data marking exactly two-and-a-half years of successive monthly improvements in business activity, new business, and employment.

Payback Time

The National Accounts data from the CSO for H1 2023 show that the rate of growth in the Irish economy has decelerated markedly from the breakneck speed seen in 2021 and 2022.

Economic data, especially on labour markets, have generally surprised to the upside to date in 2023. Global economy, though, still facing considerable headwinds, with risks to the downside.

Downside Risks Still Prevail for Global Economy

Surging inflation combined with a marked tightening of monetary policy, amid an environment of weakening confidence levels and heightened geo-political tensions, especially in relation to Ukraine, saw the world economy slow sharply during 2022. However, concerns that advanced economies could be facing a recession in 2023 have largely abated.