Dear Reader,

Today's overview of economic news and market action

• Last week, there was a risk-off tone to sentiment …
• Overall, the Euro Stoxx 50 shed circa 4%, while the S&P 500 lost 2% …
• Currency-wise, the dollar was under some downward pressure in the middle of the week …
• Meantime, sterling was supported by sticky wage and services inflation …
• However, the dollar recouped its losses and gained the ascendancy as risk appetite soured …
• As trading gets underway this morning, EUR/USD is operating back below the $1.09 threshold …
• GBP/USD is changing hands in the lower half of the $1.29-1.30 corridor …
• Meantime, EUR/GBP is trading up above the 84p handle …
• Turning to the week ahead, the highlight of a busy US data calendar will be the June reading of core-PCE inflation …

All rates quoted are indicative market rates.

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.

ECB keeping its options open

In the past week we have seen the July/August round of the key central bank meetings get underway, with the ECB first up. As expected, the Governing Council kept interest rates unchanged. This means that the Deposit rate remains at 3.75% while the Re-fi rate stays at 4.25%.