Dear Reader,

Today's overview of economic news and market action

• After a slow start, financial markets came alive in the second half of last week …
• Below consensus US CPI and stronger than anticipated UK GDP impacted sentiment near the end of the week …
• Against his backdrop, the dollar finished the week under some downward pressure …
• Meantime sterling was on the front-foot …
• As trading gets underway this morning, GBP/USD is above $1.29, having registered a fresh YTD high last week …
• EUR/GBP is down near the 84p mark …
• EUR/USD is just below $1.09, after testing above that level last week …
• This week, the ECB policy meeting will be in focus …
• Data-wise, a busy UK calendar includes updates on inflation, the labour market and the consumer …

All rates quoted are indicative market rates.

Goldilocks? Government sets Budget parameters

The recently released Summer Economic Statement set the boundaries for the upcoming Irish Budget in October, with the Government announcing a planned budget day package of €8.3bn (3% of GNI*). The majority of this is for spending measures (€6.9bn) with the remainder (€1.4bn) expected to fund income tax cuts.

Amidst the political noise, central bankers chart course for monetary policy

While political events dominated the news agenda, last week’s ECB forum in Sintra gave important hints towards near-term monetary policy. In her opening remarks at the forum, ECB President Lagarde ruled out a further cut at its July meeting, stating “it will take time for us to gather sufficient data to be certain that the risks of above-target inflation have passed,".