Morning Report

April 12, 2023

“Today’s US inflation data is highly anticipated by the market. Alongside this, the release of the Fed’s meeting minutes from March will indicate how they intend to proceed. Later, BoE Governor Andrew Bailey’s remarks may provide clarity on the UK’s near-term path.”

Tim Hallinan – Trading Director

Main Headlines

Later today the FOMC minutes will be released, which will have a significant insight into the economic and financial conditions that influenced their vote on where to set interest rates. Chicago Federal Reserve President Austan Goolsbee urged them to exercise patience when raising interest rates despite recent banking stress. He argued that a decrease in bank lending would help contain inflation and reduce the need for monetary policy intervention. He acknowledged that inflation has not sufficiently declined, despite the Fed’s aggressive interest rate hikes last year, and currently exceeds the 2% target.

According to a report by the Recruitment and Employment Confederation and KPMG, the UK labour market witnessed a deceleration in the pace of pay growth and a reduction in candidate shortage for the first time in two years. The report further mentioned that although starting salaries for permanent staff saw the second-lowest increase in almost two years, they remained at high levels when viewed historically. Megan Greene, the global chief economist of Kroll, will replace Silvana Tenreyro on the Bank of England’s panel of interest rate-setters. Greene has previously spoken about the necessity of raising BoE rates, and her appointment may lead to a more combative direction in the Monetary Policy Committee debates, which contrasts with Tenreyro’s advocacy for rate cuts.


Sterling is weaker than most major currencies in the early morning trade. The FTSE 100 index has slightly risen in early trading today, as investors adopt a wary approach in anticipation of US inflation figures and Federal Reserve meeting minutes that could impact the Bank of England’s monetary policy. The Royal Institute of Chartered Surveyors (RICS) House Price Balance will be released today. This is the leading indicator of housing inflation for the UK and the data will represent the percentage of surveyors reporting a price increase in their designated area, and if the ‘Actual’ reporting is greater than the ‘Forecast’ then Sterling should be anticipating a better showing than this morning.


The Euro is well bid against most major currencies overnight. The IMF advised yesterday that member countries need to continue tightening monetary policy to combat persistent high inflation. These warnings set a bleak tone for this week’s IMF and World Bank spring meetings in Washington, where conflicting economic and market forces complicate the policy path amid rapid interest rate hikes. World Bank President David Malpass stated that while the World Bank is prepared to assist in the rebuilding of Ukraine after Russia’s invasion, international financial institutions cannot bear the burden alone, and Western European countries must also contribute. He cited the World Bank’s significant role in rebuilding Europe’s steel industry after World War Two and suggested that the organization could play a comparable role in Ukraine.


The Dollar is stronger against Sterling and weaker against the Euro this morning. Later today we will receive Consumer Price Index (CPI) data, which will be the major indicator for the future path for US interest rates. If the figure is higher than expected, it could lead to USD strength. In the afternoon, we will also receive the 10-year bond auction reporting number, which show the highest yield on 10-year bonds the government sold at auction. The numbers reported can be used to decipher investor outlooks in interest rates, as well as overall investor confidence in the US market.


Global stock trading was muted as investors awaited US inflation data that may shed light on the Federal Reserve’s next policy move. Gauges of US futures, European and Asia Pacific equities were little changed, a sign investors are holding back on taking new positions before data that could stoke volatility across global markets. Treasury two-year yields climbed further above 4%, while the dollar was broadly lower.

Main Economic Data/Central Banks/Government (All Times CET)

8:00 a.m.: Norway Feb. GDP
8:30 a.m.: Hungary March CPI
2:30 p.m.: ECB’s Guindos speaks
2:30 p.m.: US March CPI
3:00 p.m.: BOE’s Bailey speaks
3:00 p.m.: ECB’s de Cos speaks
6:00 p.m.: Russia March CPI
8:00 p.m.: FOMC Mar. 22 meeting minutes
8:15 p.m.: ECB’s Villeroy speaks
Ukraine’s Volodymyr Zelenskiy to address the IMF/World Bank meeting in a live-streamed discussion

Corporate Events

Earnings include Apogee Enterprises


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