Dear Reader,

Today's overview of economic news and market action:

• ECB left policy on hold yesterday as expected …
• Eurozone futures contracts softened in the initial aftermath of the press conference …
• Amid the softening in Eurozone market rate expectations, the euro was on the defensive …
• At the same time, the dollar was holding a firmer tone …
• Sees EUR/USD open this morning on the lower half of $1.08-1.10 …
• EUR/GBP is in the bottom half of 85-86p …
• Today, the December reading of core-PCE will feature …

ECB on hold for third straight meeting

The first policy setting meeting of the ECB’s Governing Council for 2024 saw the Central Bank maintain its key deposit rate at 4%.

Markets and central banks remain at odds on the path for interest rates

Further significant declines in inflation rates look to be in store this spring virtually everywhere, as large price increases a year earlier drop out of the annual comparison.

World economy grew at a very modest pace in 2023. Subdued growth expected again in 2024, with continuing weak performance by most advanced economies in particular. Inflation fell sharply last year and further moderation in price pressures anticipated in 2024.

Renewed downturn in manufacturing order books, but business optimism improves slightly

The AIB Ireland Manufacturing PMI® pointed to worsening business conditions as 2023 drew to a close, representing a setback after the stabilisation seen during November.