April 6, 2023

“UK house prices unexpectedly rose for the third month in a row, indicating a continued stabilization of the market. In early trade, commodity-related stocks lifted the FTSE 100 index, however, most European markets remain range-bound due to concerns about a potential US recession.”

Tim Hallinan – Trading Director

Main Headlines

Donald Trump, the former US president, after pleading not guilty to 34 felony counts of falsifying business records in New York, urged his Republican colleagues in Congress to reduce the funding of the US Justice Department and the FBI yesterday. In other news, US prosecutors in Boston announced criminal charges against three former executives of medical device company Magellan Diagnostics. The charges allege that the executives concealed a malfunction in the company’s lead-testing devices that caused tests to severely underestimate the level of lead in people’s blood.

Shell anticipates a rise in liquefied natural gas production for the first quarter due to stable earnings from trading and outages at its Australian plants last year, according to a statement made today. The company projected liquefaction volumes of 7 to 7.4 million tonnes for the first quarter, up from the previous quarter’s 6.8 million tonnes. In other news, the UK Treasury and business/trade ministers have suspended their dealings with the CBI lobby group, according to the BBC. The move follows several serious allegations made against the group. The CBI responded by acknowledging the government’s decision and awaiting the investigation’s outcome.

GBP

Sterling is well bid against most major currencies overnight. According to data released by Halifax, British house prices increased for the third consecutive month in March, indicating a continued stabilization of the market. The report revealed that there was a 0.8% rise in month-on-month terms, which is the second highest increase since June 2022, following a 1.2% gain in February. In other news, a UK lawmaker, Scott Benton, has been suspended from his position after being caught in a newspaper sting operation. The operation revealed that Benton had offered to use his influence to lobby ministers and also leak confidential information that could have affected the market, all on behalf of a fictitious company.

EUR

The Euro is stronger against the Dollar and weaker against Sterling this morning. This morning French President Emmanuel Macron and EU leader Ursula von der Leyen initiated a series of meetings with Chinese officials in Beijing. These discussions have the potential to establish a new direction for the bloc’s relationship with China, which has been fraught with tension in recent years. The Dutch government faced a no-confidence vote due to their plan to cut nitrogen emissions on farms, following protests by farmers’ party opposing the move in provincial elections.

USD

The dollar is weaker than most major currencies in the early morning trade. Taiwanese President Tsai Ing-wen met with U.S. House Speaker Kevin McCarthy in California yesterday. This is the highest-level U.S. meeting with a Taiwanese leader on US soil in decades. The focus was on the need to hasten arms deliveries to Taiwan in response to increasing threats from China. The US State Department prevented four Georgian judicial officials from entering the country. Secretary of State Antony Blinken stated that these individuals had misused their positions as court Chairmen and members of Georgia’s High Council of Justice.

Markets

Treasury yields headed for one of the longest streaks of decline since 2020 and US equity-index futures were little changed as bets the world economy is set for a sharper slowdown outweighed concerns over elevated inflation and monetary tightening. The two-year US government-bond yield slid for a fifth day, while the 10-year rate witnessed a seventh day drop. That was the longest sequence of declines since 2020, barring similar moves around the July 4 holidays in the past two years. Contracts on the S&P 500 and Nasdaq 100 indexes slipped less than 0.1% each, while a gauge of global stocks headed for a weekly loss, after a private US jobs report and purchasing managers’ indexes provided further evidence of weakening growth in the world’s largest economy.

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

10:30 a.m.: UK March S&P Global/CIPS Construction PMI
2:30 p.m.: US weekly Jobless Claims
3:00 p.m.: Poland Central Bank’s Glapinski speaks
7:00 p.m.: Baker Hughes US rig count
UK Decision Maker Panel Survey

Corporate Events

Earnings include Constellation Brands, Levi Strauss

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