Euro bounces slightly but still under pressure

The euro ended last week just below $1.02, having taken back a small amount of ground on Friday. This follows a dismal performance over the past week or so, with the single currency falling from around $1.06 to touch off below $1.01 at times. With European economic data showing weakness, the ever-present threat of Russia cutting off gas supplies and the ECB seemingly hesitant to be as hawkish as its counterparts in the Fed, the pressure is likely to remain on the euro and already this morning it has dipped once again below $1.015

Despite the doom and gloom, equities managed to make a weekly gain last week, which was a rare occurrence in the first half of the year. Markets still remain very volatile but eurostoxx closed up 1.7% for the week, the FTSE 0.4% and the S&P 1.9%. With signs global growth is slowing and plenty of uncertainty around, further volatility is likely in store

There was also plenty of movement in the bond market, 10-year US yields ended last week at close to 3.1% having been as low as under 2.8% at times during the week but the current yield is lower than around 3.5% we saw in the middle of June. Similarly, 10-year German yields finished the week at close to 1.35%, from a low of c 1.15% intraday during the week, but well down on yields seen just a few weeks ago

US non-farm payrolls came in better than expected in June, up 372,000 -almost the same as the May increase (384,000) -against a consensus forecast of 265,000. The year-over-year change in wages eased slightly from 5.3% in May to 5.1% in June (the monthly change was the same at 0.3%), while wages aren’t keeping up with inflation the Fed would like to see some heat come off both wages and inflation least the former should try to chase the latter. The unemployment rate was unchanged at 3.6%.

Data due this week include UK retail sales, industrial production and monthly GDP, EA industrial production, US retail sales, industrial production, inflation and the Fed beige book and closer to home we get Irish inflation and the 2021 national accounts