Dear Reader,

Today's overview of economic news and market action:

• • Central bank speakers and inflation data impacted markets yesterday … 
  • “Less hawkish” central bank rhetoric, and encouraging inflation data led to a softening in rates …
  • Market expectations of an ECB rate hike in September declined ….
  • Futures are pricing in a lower peak in UK rate also. US rates were more static …
  • Against this backdrop, the dollar recouped some of its recent losses …
  • Sees EUR/USD open this morning in the lower half of $1.08-1.09 …
  • Today, the US labour market report is due …

PMI declined to 47.0 in July, as business conditions softened for a fifth consecutive month. New orders, and output fell. Meantime, there was a further easing in price inflation

Economic data, especially on labour markets, have generally surprised to the upside to date in 2023. Global economy, though, still facing considerable headwinds, with risks to the downside.

Still Flashing Amber

Surging inflation combined with a marked tightening of monetary policy, amid an environment of weakening confidence levels and heightened geo-political tensions, especially in relation to Ukraine, saw the world economy slow sharply during 2022

Downside Risks Still Prevail for Global Economy

Surging inflation combined with a marked tightening of monetary policy, amid an environment of weakening confidence levels and heightened geo-political tensions, especially in relation to Ukraine, saw the world economy slow sharply during 2022. However, concerns that advanced economies could be facing a recession in 2023 have largely abated.