Dear Reader,

Today's overview of economic news and market action

• Key focus for markets last week was US labour market data for August
• However, the data had no significant impact on market rate cut pricing for Fed
• Currency-wise, main pairs confined to fairly narrow ranges last week
• EUR/USD opens this morning below $1.11
• EUR/GBP continues in the lower end of 84-85p
• Busy macro diary ahead this week
• Includes ECB meeting, US CPI inflation, UK labour market and GDP data

All rates quoted are indicative market rates.

Moderate growth beneath volatile Irish GDP data

This week’s Irish GDP data provide the first full breakdown of the economy in Q2 2024. Beneath the perennially volatile GDP data (-1% q/q, -4% y/y), the domestic indicators point to a moderate growth picture so far in 2024.

The headline AIB Ireland Manufacturing PMI® edged up to its highest level since February and signalled a marginal overall improvement in business conditions. An upturn in manufacturing sector performance mostly reflected sustained production growth and a faster rise in employment numbers. Survey respondents often commented on efforts to boost capacity in line with long-term business expansion plans.

Irish services activity continued to rise solidly in August, AIB PMI® survey data indicated. Growth of both new business and employment accelerated, and outstanding work increased at the strongest rate in nearly a year. Less positively, the overall 12-month outlook was the weakest since November 2022.

House prices continue to trend sharply higher. They were up 8.6% YoY in June. Consumer prices rose by 0.2% in July, amid further increases in transport and hospitality costs. Revisions to the data show the unemployment rate averaged 4.4% in Q2’24 up from 4.3% in Q1’24. The preliminary reading indicates GDP expanded by 1.2% in Q2’24, but it remained 1.4% lower in YoY terms.