Euro a touch softer

The euro has edged down a little against both the dollar and sterling, trading at around $1.0825 and 84.2p respectively this morning, ahead of second-quarter GDP data for the Euro area later this morning. The pound is little changed against the US currency, hovering in and around $1.2850.

Government bond yields nudged lower at the start of the week. German and UK 10-year yields led the way, falling by around 5bps or so, while equivalent US yields were about 2bps lower. In equity markets, European stocks reversed some of Friday’s gains, shedding almost 1%, while US indices were broadly flat on the day.

The French economy expanded again in the second quarter of the year according to data published earlier this morning. GDP rose by 0.3% q-o-q in Q2, following an upwardly revised increase of 0.3% in the first quarter, and was up 1.1% on the same quarter in 2023.

GDP in Ireland rose for a second quarter in a row in Q2 according to the CSO’s flash estimate published yesterday (having fallen in each of the four quarters of 2023), increasing by 1.2% q-o-q driven by an increase in output in the multinational dominated Industry sector of the economy.

This morning’s Euro area GDP data are expected to show the economy expanded again in Q2 but with the pace of growth easing to 0.2% q-o-q from 0.3% in the opening quarter of the year. The European Commission’s latest Economic Sentiment Indicator for the zone is published today as well, while consumer confidence and house prices are due in the US. Meanwhile, the Fed begins its two-day monetary policy meeting today with the market expecting it to keep interest rates on hold.