Dear Reader,

Today's overview of economic news and market action

• Some notable market action last week
• Pairing back of rate cut expectations
• Dollar very much holding the upper hand
• EUR/USD fell to new YTD low below $1.07
• GBP/USD below $1.25
• Ahead this week, the Middle East will be very much in focus
• Data-wise, busy flow of releases, including UK CPI and US retail sales

ECB’s Dovish Hold Sets the Stage for June Cut

While markets were largely unmoved by the ECB’s latest monetary policy statement, the tone of the statement and President Lagarde’s press conference was very much a dovish one.

BoE gradually moving towards cutting interest rates

The March meeting of the Bank of England’s Monetary Policy Committee (MPC) saw the central bank keep its key interest rate unchanged at 5.25%. This decision was very much in line with market expectations.

ECB signals June rate cut on the cards

As widely anticipated, the ECB’s Governing Council meeting for April saw the central bank maintain its key deposit rate at 4%. It marked the fifth consecutive policy meeting that the ECB has kept rates unchanged. There was “consensus” rather than unanimity within the Governing Council on the decision.

PMI jumped to 52.2 in Feb, its highest level since June 2022. A sharp rise in output and employment, alongside growth in new orders were the key features of the survey.