Dear Reader,

Today's overview of economic news and market action

• Equity markets in Europe and the US stabilised yesterday …
• The modest recovery coincided with calmer, albeit still choppy trading conditions …
• The main FX pairs have operated in much tighter ranges over the past 24 hours …
• Of the price action to note, the yen and sterling have been under some downward pressure …
• Elsewhere, the dollar was holding a firmer tone …
• The stronger dollar sees EUR/USD open in the lower half of the $1.09-1.10 …
• GBP/USD is changing hands back near the $1.27 threshold …
• EUR/GBP is operating just below the 86p handle …
• USD/JPY is trading up above the midpoint of ¥146-147 …
• Today’s macro calendar is quiet on both sides of the Atlantic …

All rates quoted are indicative market rates.

AIB Ireland Manufacturing PMI® indicated a broad stabilisation in operating conditions across the Irish manufacturing sector at the start of the third quarter, thereby ending a four-month period of deterioration. Underlying data hinted at early signs of recovery in demand conditions. Meanwhile, output was raised for the first time since February.

AIB PMI® survey data indicated the slowest rise in total activity in the Irish service sector for three months in July, but growth of new business accelerated and the year-ahead outlook improved. Outstanding business increased at the strongest rate in ten months and employment growth picked up from June's recent low. 

The ECB meeting for July saw the Governing Council keep its key interest rates unchanged. This means that the Deposit rate remains at 3.75% while the refi rate stays at 4.25%. The ‘hold’ on rates in July follows the 25bps rate cut implemented in June to the main interest rates. This represented its first rate change in six meetings after previously being on a rate hiking cycle.

The US Federal Reserve Open Market Committee (FOMC) meeting for July saw the central bank leave its key interest rate policy unchanged. This decision was very much in line with expectations. The target range for the Fed funds rate remains at 5.25-5.50%, a 22-year high.

The August meeting of the Bank of England’s Monetary Policy Committee (MPC) saw the central bank lower the Bank rate by 25bps to 5.00%. This was the first rate change from the Bank of England in eight meetings. Subsequent to this, the central bank had been on a rate tightening cycle over the period December’21 to August’23.