Dear Reader,

Here is an overview of today's economic news and market action:

• Risk-off mood on markets yesterday ...
• Modest softening in market rate hike expectations, most notably in the Eurozone...
• Currency-wise, safe havens such as the dollar and yen were in the ascendancy ...
• EUR/USD opens this morning back near $1.10...
• GBP/USD is changing hands near the midpoint of $1.24-1.25 ...
• EUR/GBP is at the halfway mark of 88-89p ...
• Relatively quiet data schedule ahead today...

Storm Clouds Gathering

• It is a tricky balancing act for central banks in trying to engineer a slowdown in economic activity to lower inflation, by tightening monetary policy, without going too far in hiking rates, and having an even greater contractionary impact on demand.

Sensitive Expectations

It is a tricky balancing act for central banks in trying to engineer a slowdown in economic activity to lower inflation, by tightening monetary policy, without going too far in hiking rates, and having an even greater contractionary impact on demand. 

• Economic data have generally surprised to the upside in first quarter, helped by easing inflation. However, possible credit crunch and tighter lending standards new risk to activity