Dear Reader,

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

• Quiet start to the week on markets …
• S&P 500 initially moved lower, but recovered late on …
• EUR/USD opens this morning in the top half of $1.08-1.09 …
• GBP/USD is changing hands at the $1.24 mark …
• EUR/GBP remains above the midpoint of 87-88p …
• Today, EZ retail sales (Feb), US NFIB index (Mar) and Fed speakers are due …

A Fine Margin

There was a welcome sharp fall in headline inflation in the Eurozone in March as the sharp jump in energy prices following the Russian invasion of Ukraine early last year started to drop out of the annual rate. Inflation fell to 6.9% from 8.5% in February and is now well below the peak level of 10.6% hit last October.

Reversal of Fortune

• March has seen a welcome sharp fall in headline inflation in the Eurozone.
• Wholesale energy prices have been in marked decline since last summer and are now below the levels that prevailed ahead of the Russian invasion of Ukraine
• A recent excellent paper from the ECB (How tit-for-tat inflation can make everyone poorer) clearly demonstrates that soaring profit margins are mainly responsible for the marked pick-up in domestic inflation

Ireland’s manufacturing sector crept back into contraction territory in March. Intakes of new orders and manufacturing production both decreased on the month following some tentative signs of improvement in February and consequently, firms scaled back input purchasing further.