April 4, 2023

“This morning USD weakened, allowing the pound to hit 10-month highs against the dollar and London’s FTSE 100 extended its growth for the seventh consecutive session. The EUR is also up on the back of the USD weakness, with attention focused on US JOLTS Job Openings data to be closely watched this afternoon.”

Tim Hallinan – Trading Director

Main Headlines

Fed Governor Lisa Cook has stated that although US inflation is easing, there could still be price pressures emanating from a tight labour market, the ongoing war in Ukraine, and China’s reopening post-Covid. While the “disinflationary process” has begun, it has not yet been fully realized in the markets so far. Bloomberg Economics has pointed out that today’s JOLTS report might indicate a decline in job openings in February, but with under 2 openings per unemployed worker it highlights the tightness of the job market.

This morning, London’s FTSE 100 index extended its rally for the seventh consecutive session, supported by gains in financials and commodity-related stocks. However, OKYO Pharma Ltd suffered a setback, with its share price falling by 14.6% to reach a ten-month low. The bio-pharmaceutical firm’s decision to delist from the London Stock Exchange next month was attributed to low valuations and weak trading volumes.

GBP

Sterling is well bid against most major currencies overnight. This morning, Virgin Orbit Holdings, owned by Richard Branson, filed for Chapter 11 bankruptcy as the satellite launch firm was unable to acquire the necessary long-term funding to recuperate from a rocket failure that took place in January. In other news, the Ministry of Defence announced today that Lockheed Martin and BAE Systems have been awarded a contract worth 161 million GBP for providing maintenance support to F-35 jets. This contract is expected to generate 140 job opportunities within the country.

EUR

Euro is stronger against the dollar and weaker against sterling this morning. Finland will definitively join NATO, which will effectively double the length of the border that NATO states will be sharing with Russia. In response to this, sources in Moscow announced yesterday that it would strengthen its military presence in its western and north-western regions. Meanwhile, Bulgaria’s parliamentary elections, the fifth in two years, once again failed to produce a clear winner, signalling difficult coalition talks ahead and trouble for the country.

USD

The dollar is weaker than most major currencies overnight. Former US President Donald Trump has widened his lead over his rivals in the 2024 Republican presidential nominating contest, gaining another 4% over a poll in March to a total of 48% of the Republican base, even as he faces criminal charges in New York. Meanwhile, the current administration said on Monday it could not confirm reports that China was able to collect real-time data from a spy balloon as it flew over sensitive military sites earlier this year, stating that the analysis was still ongoing.

Markets

European stocks posted modest gains and US equity futures were steady as investors weighed weak factory data against inflation concerns from OPEC+’s plan to cut oil output to assess the path of interest rate increases. Basic resources and real estate shares led the advance in the Stoxx Europe 600 Index. Glencore Plc rose amid its continued interest in a takeover of Canadian miner Teck Resources Ltd. Contracts for US indexes were little changed following a mixed session Monday on Wall Street. In Asia, declines in Chinese technology stocks pulled MSCI Inc.’s Asia-Pacific benchmark slightly lower.

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

8:00 a.m.: Germany Feb. Trade Balance
10:00 a.m.: ECB Consumer Expectations Survey
11:00 a.m.: Euro-Area Feb. PPI
4:00 p.m.: US Feb. Factory Orders, JOLTS job openings, Durable Goods
4:00 p.m.: ECB’s Centeno speaks
4:30 p.m.: BOE’s Pill speaks
Romania Rate Decision
Antony Blinken attends EU-US energy council meeting in Brussels
NATO foreign ministers meet in Brussels

Corporate Events

Credit Suisse holds AGM in Zurich
Walmart holds its first in-person investor meeting since 2020 in Florida
LedgerX, FTX’s crypto-derivatives platform, to be auctioned
Earnings include Acuity Brands

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