Dear Reader,

Today's overview of economic news and market action

• Busy day on markets yesterday, amid US CPI data and the Fed FOMC policy decision …
• US CPI printed slightly below the consensus. The Fed left policy on hold but struck a hawkish tone …
• Against this backdrop, the dollar has softened overall in the past 24 hour …
• This sees EUR/USD open today up at the $1.08 threshold …
• GBP/USD is in the top half of $1.27-1.28 …
• EUR/GBP is up at the halfway mark of 84-85p …
• Today, the main release of note will be Eurozone industrial production for April …

The ECB’s Governing Council meeting for June saw the central bank cut its key interest rates by 25bps. The Deposit rate was lowered to 3.75% (from 4.00%), while the refi rate was reduced to 4.25% (from 4.50%). The June rate changes follow five consecutive policy meetings where the ECB kept rates on hold, having been in a rate hiking cycle between July’22 to September’23.

The latest AIB PMI® survey data indicated a faster increase in Irish service sector activity in May, as new business growth strengthened. The 12-month outlook also improved, and this was reflected another robust rise in services employment. There was a notable rebound in the Technology, Media & Telecoms sector, while Financial Services continued to expand sharply.

AIB Ireland Manufacturing PMI® data signalled a broad stabilisation in operating conditions in May as the headline index from the survey ticked up to a three-month high. Softer and only marginal contractions in output volumes and incoming new work were recorded during the latest survey period.