Dear Reader,

Today's overview of economic news and market action:

• • Last week the ECB meeting had a major influence on sentiment …
  • The central bank hiked by 25bps, but markets are of the view that Eurozone rates have no peaked …
  • Meantime, US rate expectations firmed and UK rates softened …
  • Currency-wise, the dollar was in the ascendancy once again …
  • Sees EUR/USD open today below $1.07 … 
  • GBP/USD is back at the $1.24 threshold … 
  • EUR/GBP is just above 86p …
  • This week, the US Fed, BoJ and BoE policy meetings will be in focus …
  • Fed and BoJ expected to leave rates on hold, while the BoE is likely to hike by 25bps …

ECB Depo rate hits 4%, likely to be the peak

The September meeting of the ECB’s Governing Council saw the Central Bank raise rates by a further 25bps, pushing the key deposit rate up to 4.00%.

Recession Required for Rate Cuts

Markets are of the view that we have seen the last ECB rate hike, following Thursday’s 25bps increase, which brought the key deposit rate up to 4%.

AIB Ireland Services PMI - August

Strong growth in the Irish service sector was sustained during August with the latest AIB PMI® survey data marking exactly two-and-a-half years of successive monthly improvements in business activity, new business, and employment.

Top Dollar

Although the US dollar has retreated from last year’s peaks, which saw it reach its highest point on a trade-weighted basis in 20 years, it has remained at very elevated levels in 2023.