Dear Reader,

Today's overview of economic news and market action

• There was a cautious tone to investor sentiment yesterday …
• Oil prices fell by over 2%, with Brent crude moving to a 3-year low, below $70 per barrel …
• Currency-wise, traditional safe havens such as the yen and Swiss franc were in the ascendancy …
• The dollar’s progress was hampered by a modest softening in US market rate expectations …
• EUR/USD opens this morning in the lower half of $1.10-1.11 …
• EUR/GBP is changing hands in the bottom half of 84-85p …
• GBP/USD is operating up at the $1.31 threshold …
• USD/JPY is trading down near the ¥141 handle …
• Today, the focus will be on US CPI inflation for August …

All rates quoted are indicative market rates.

Moderate growth beneath volatile Irish GDP data

This week’s Irish GDP data provide the first full breakdown of the economy in Q2 2024. Beneath the perennially volatile GDP data (-1% q/q, -4% y/y), the domestic indicators point to a moderate growth picture so far in 2024.

The headline AIB Ireland Manufacturing PMI® edged up to its highest level since February and signalled a marginal overall improvement in business conditions. An upturn in manufacturing sector performance mostly reflected sustained production growth and a faster rise in employment numbers. Survey respondents often commented on efforts to boost capacity in line with long-term business expansion plans.

Irish services activity continued to rise solidly in August, AIB PMI® survey data indicated. Growth of both new business and employment accelerated, and outstanding work increased at the strongest rate in nearly a year. Less positively, the overall 12-month outlook was the weakest since November 2022.

House prices continue to trend sharply higher. They were up 8.6% YoY in June. Consumer prices rose by 0.2% in July, amid further increases in transport and hospitality costs. Revisions to the data show the unemployment rate averaged 4.4% in Q2’24 up from 4.3% in Q1’24. The preliminary reading indicates GDP expanded by 1.2% in Q2’24, but it remained 1.4% lower in YoY terms.