Dear Reader,

Today's overview of economic news and market action: 

• There was a positive mood on markets throughout last week …
• This was largely driven by the US and China agreeing to reduce tariffs for 90-days …
• The “risk-on” mood on markets saw the Euro Stoxx 50 and the S&P 500 move higher …
• At the same time, there was a marked firming in market interest rate expectations …
• The dollar was initially in the ascendancy but it handed back most of its gains as the week progressed …
• This sees EUR/USD open today near $1.12 …
• EUR/GBP is just above the 84p handle …
• GBP/USD is in and around the $133 threshold …
• This week, the flash PMIs for May will highlight a busy data schedule …

All rates quoted are indicative market rates.

The AIB Ireland Services PMI® survey data for April indicated a loss of growth momentum in the services economy as concerns over the economic impact of international trade tensions grew. Total activity and new business increased at the slowest rates in 15 and 18 months, respectively. Moreover, the 12-month outlook was the weakest since October 2020, linked to uncertainty over the fallout from US tariff policies and financial market volatility. That said, companies continued to expand their work forces at a robust rate and outstanding business increased further, while inflationary pressures softened.

April data highlighted a robust upturn in Irish manufacturing production, supported by a further acceleration in new order growth to its strongest for three years. Domestic demand was the main factor boosting manufacturing workloads as export sales dipped slightly since March. Survey respondents commented on head winds from US tariffs and rising global economic uncertainty, but there were also reports of improving demand from European clients. Squeezed margins remained a challenge for goods producers, with input cost inflation hitting a 26-month high in the latest survey period.