Dear Reader,

Here is an overview of today's economic news and market action:

• Market action was mostly sideways yesterday
• Investors were awaiting news on US debt ceiling negotiations
• Currency-wise, there were no major moves in dollar pairs
• EUR/USD was straddling the $1.08 level
• Elsewhere, EUR/GBP continued mostly  in a tight range just below 87p
• Ahead today, flash PMIs for May due
• Investors though will be likely more focused on debt ceiling talks

UK Economy Down, But Not Out

The Bank of England’s (BoE) latest set of detailed economic forecasts show it is no longer expecting a recession in the UK. The forecasts are contained in its quarterly Monetary Policy Report for May 2023.

Life in the old buck yet

The dollar was in the ascendancy from mid-2021 through to autumn 2022 as hikes in US interest rates, rising US bond yields and elevated geo-political tensions drove the currency to twenty year highs

Economic data have generally surprised to the upside year-to-date, though GDP growth was sluggish in Q1. Tighter credit and lending conditions could weigh on activity as year progresses.