Dear Reader,

Today's overview of economic news and market action

• Positive tone to European investor sentiment yesterday
• Against backdrop of results from round one of French elections
• Main equity indices made gains
• French vs. German yield spread narrowed
• However, boost to euro was short lived
• EUR/USD moved back below midpoint of $1.07-1.08
• Today’s data highlight are Eurozone inflation numbers for June

AIB Ireland Manufacturing PMI® data indicated a deeper deterioration in operating conditions across the Irish manufacturing sector in June. The downturn was the most severe in nearly a year as underlying demand trends continued to worsen and thereby resulted in sharper contractions in new factory orders and production.

Consumer prices rose by 0.5% in May, amid an increase in transport and hospitality costs. However, the YoY rate stayed at 2.6%. Consumer sentiment declined, albeit marginally, for a fourth consecutive month in May. Revisions to the data show the unemployment rate averaged 4.2% in Q1’24 down from 4.5% in Q4’23. On a monthly basis, it has printed at 4.0% in Mar-May.

Renewed momentum in Irish residential property prices 
Irish residential property prices experienced quite a turnaround over the course of 2023. Initially they started the year on a downward trajectory, with the CSO measure of official house prices registering monthly falls, averaging 0.3% in the first 5 months of the year, against the backdrop of rising interest rates.