Dear Reader,

Today's overview of economic news and market action:

• Central bank rhetoric, sticky UK inflation and strong US data impacted market sentiment last week …
• Against this backdrop, futures contracts hardened across the board …
• Currency-wise, the dollar was holding a slightly firmer tone …
• Sees EUR/USD open today at $1.09 …
• EUR/GBP is in the top half of 85-86p …
• Busy macro calendar for the week ahead. Notably, ECB meeting due on Thursday …
• US Q4 GDP and core-PCE (Dec), as well as, the flash PMIs for main economies (Jan) are due … 

Play it Again Sam

The most notable feature of the main currency markets over the past year or so has been the predominance of narrow trading ranges, with the exception of the yen, which has fallen sharply.

World economy grew at a very modest pace in 2023. Subdued growth expected again in 2024, with continuing weak performance by most advanced economies in particular. Inflation fell sharply last year and further moderation in price pressures anticipated in 2024.

Renewed downturn in manufacturing order books, but business optimism improves slightly

The AIB Ireland Manufacturing PMI® pointed to worsening business conditions as 2023 drew to a close, representing a setback after the stabilisation seen during November.

Service sector expansion sustained in December as business outlook for 2024 improves

The December AIB PMI® survey data signalled a further rise in service sector activity, extending the current growth sequence that began March 2021.