Dear Reader,

Today's overview of economic news and market action:

• • Quiet start to the week on markets yesterday
  • Investor sentiment was holding a cautious tone
  • Amid key central bank events due later this week
  • Currency-wise, main pairs were within narrow ranges 
  • EUR/USD continued to trade near to the midpoint of $1.06-1.07 
  • EUR/GBP remained close to the 86p threshold
  • Today’s macro data diary is lacking in top tier releases

Markets Expect ECB Rate Cuts in 2024

Markets are of the view that we have seen the final ECB rate hike, following last Thursday’s 25bps increase, which brought the key deposit rate up to 4%.

ECB Depo rate hits 4%, likely to be the peak

The September meeting of the ECB’s Governing Council saw the Central Bank raise rates by a further 25bps, pushing the key deposit rate up to 4.00%.

Recession Required for Rate Cuts

Markets are of the view that we have seen the last ECB rate hike, following Thursday’s 25bps increase, which brought the key deposit rate up to 4%.

AIB Ireland Services PMI - August

Strong growth in the Irish service sector was sustained during August with the latest AIB PMI® survey data marking exactly two-and-a-half years of successive monthly improvements in business activity, new business, and employment.