Dear Reader,

Today's overview of economic news and market action

• The mixed mood on markets from last week carried over into yesterday …
• On the currency front, trading conditions were somewhat volatile …
• Overall, the dollar was in the ascendancy, while the yen was under pressure …
• Sterling initially weakened as UK rates softened but recovered its losses later on …
• EUR/GBP opens this morning back closer to the 84p threshold …
• EUR/USD operating down in the lower half of the $1.08-1.09 range …
• GBP/USD is at the midpoint of the $1.28-1.29 corridor …
• USD/JPY is changing hands up in the top half of the ¥154-155 band …
• There is a busy data schedule ahead on both sides of the Atlantic today …

All rates quoted are indicative market rates.

Consumer prices rose by 0.4% in Jun, amid an increase in transport and hospitality costs. However, the YoY rate fell to 2.2%. HICP inflation rose by 0.3% in the month, with the annual rate declining to 2.0%.

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.

No summer vibe to markets yet

Despite being in the midst of the summer holiday season, political events, macro data surprises, central bank commentary and global trade tensions have meant that the normal lull that tends to set into markets around this time of year, has been absent so far.