Dear Reader,

Today's economic news and market action:

• Firmer tone to risk appetite yesterday
• Reflected in gains on equity markets
• On the currency front, the dollar softened
• At the same time, sterling had some upward momentum
• EUR/USD opens this morning back above $1.07
• EUR/GBP has edged back down into lower half of 88-89p
• Ahead today, the main data highlight is US CPI inflation for January

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Got Sunshine on a Cloudy Day

The title of the IMF’s recent World Economic Outlook Update sums up the current state of the global economy quite well; “Inflation Peaking amid Low Growth”.

Is the soft landing for the US economy, that even the US Federal Reserve had doubts could be achieved, coming into view for 2023? US Treasury Secretary, Janet Yellen, seems to think so, cementing last week that she sees a path in which the US economy avoids recession, helped by a significant decline in inflation and a strong labour market.

AIB's Economic Research Unit provides regular commentary on the domestic and global economy, currency and interest rate markets, and special commentary on key events...