Dear Reader,

Today's overview of economic news and market action

• A plethora of significant macroeconomic developments influenced financial markets last week …
• US Tariff newsflow had a significant impact on markets …
• Elsewhere, the BoE cut rates by 25bps, in-line with expectations …
• Meantime, the latest US labour market report for January was mixed …
• This led to significant gyrations on financial markets, with the main FX pairs in wide trading bands …
• As trading gets underway this morning, EUR/USD is in the lower half of $1.03-1.04 …
• GBP/USD is just above $1.24 …
• EUR/GBP is in the bottom half of the 83-84p corridor …
• Busy US data calendar (CPI, retail sales, industrial production) this week …

All rates quoted are indicative market rates.

The first policy setting meeting of the Bank of England’s Monetary Policy Committee (MPC) for 2025 saw the central bank cut the Bank rate by 25bps to 4.50%. This means that the central bank has now cut by a total of 75bps in its current easing cycle, which began in August of last year.

2025 commenced on a solid note, with the Irish manufacturing sector recording an improvement in operating conditions for the first time in three months. Fresh expansions were noted for both new orders and output. More positively, confidence for the year ahead outlook remained strongly optimistic, with many businesses planning to expand capacity.

ECB cuts again, with another cut on the cards for March

The first ECB Governing Council policy setting meeting of 2025 saw the central bank cut interest rates. It reduced them by 25bps, with the Deposit rate lowered to 2.75%, while the Re-fi rate was decreased to 2.90%. This marked the fifth 25bps rate cut since the ECB commenced its easing cycle in June of last year. Today’s decision by the ECB to cut rates was unanimous.