Morning Report

August 1, 2023

“The housing market is facing the brunt of rising interest rates, experiencing a 3.8% year-on-year decline in July, the fastest in 14 years. Meanwhile, the UK’s manufacturing PMI surpassed expectations, reaching 45.3, and the EU’s manufacturing PMI remained steady at 42.7.”

Sam Cornford, Partner – Head of Trading

Main Headlines

US State attorney generals have asked the 5th US Circuit Court of Appeals to lift an order limiting government officials’ ability to push social media companies to moderate harmful content. The order is currently on hold while the Biden administration appeals it. The attorneys general argue that the order hampers efforts to combat the spread of false information on social media platforms. In other news, the top US utility lobby group, Edison Electric Institute, intends to resist the Biden administration’s proposals to upgrade natural gas-fired power plants and reduce climate-warming emissions. The power industry, accounting for a quarter of the nation’s greenhouse gas emissions, ranks second only to transportation, as per the Environmental Protection Agency data. This opposition poses a challenge to President Joe Biden’s aim of decarbonizing the power sector by 2035, a vital aspect of his climate change agenda.

According to mortgage lender Nationwide, British house prices experienced the largest decline since 2009 in the 12 months leading up to July. The housing market was negatively impacted by rising interest rates, resulting in a 3.8% drop in average house prices compared to July of the previous year. This follows a 3.5% annual fall in June. In other news, Britain sanctioned Russian judges and prosecutors for a politically motivated conviction of opposition politician Vladimir Kara-Murza and demanded his release. He lost his appeal against a 25-year jail sentence for treason and other offenses in April. Asset freezes and travel bans were imposed on Moscow City Court Judges Vitaly Belitsky and Ekaterina Mikhailovna Dorokhina. Also, District Court Judge Natalia Nikolaevna Dudar was sanctioned for extending Kara-Murza’s pre-trial detention.


Sterling is stronger against the Euro and slightly weaker against the Dollar this morning. Earlier, the Final manufacturing PMI was released. The last few months have been relatively stable, with the forecasted figures closely aligning with the actual. Today’s figure outdid expectations, coming in at 45.3. The BRC Shop Price Index was also released this morning, measuring the change in the price of goods at retail stores and comes about 10 days ahead of the CPI read. The figures have shown a consistent decrease in the last few months of reporting, with this month continuing the trend and decreasing 0.8% from last month to 7.6%.


The Euro is weaker than most major currencies in the early morning trade. Earlier, the EU Final Manufacturing PMI was released. There has been very stable forecasting for the last few months, with a deviation of only 3bps at most. This trend continued with the forecast matching the actual at 42.7. There were also 2 unemployment reports out of the Eurozone; the German Unemployment change which came in at –4K against the forecast of 19K, and the Italian Unemployment rate which came in under expectations at 7.4% vs 7.7%.


The Dollar is well bid against most major currencies overnight. Later today, the US Manufacturing PMI will be watched and follows the same releases from the UK and EU. The last few months have been relatively stable, with the current forecast expected at 46.9. Alongside this, the JOLTS job openings data will be released, measuring the number of job openings during the previous month. The last few months reporting have shown volatility, with large deviations from the forecast falling on either side. The current forecast is at 9.61M.


Markets kicked off August on a cautious note as investors responded to the latest news on company earnings and the health of China’s economy. The dollar posted modest gains. Mining stocks were the biggest decliners in Europe following weak data on China’s manufacturing and property sectors, as Rio Tinto Plc and Anglo-American Plc led their peers lower. Banks outperformed, with HSBC Holdings Plc advancing after announcing a new share repurchase program and earnings that outpaced estimates. In Asia, Toyota Motor Corp. closed at a record high after its stronger-than-expected operating profit.

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

8:00 a.m.: UK July Nationwide House PX
8:30 a.m.: Sweden July Swedebank/Silf PMI Manufacturing
9:00 a.m.: Hungary July Manufacturing PMI
9:00 a.m.: Turkey July S&P Global/ICI Manufacturing PMI
9:15 a.m.: Spain July HCOB Manufacturing PMI
9:45 a.m.: Italy July HCOB Manufacturing PMI
9:50 a.m.: France July HCOB Manufacturing PMI
9:55 a.m.: Germany July HCOB Manufacturing PMI
10:00 a.m.: Italy June Unemployment
10:00 a.m.: Norway July DNB/NIMA PMI Manufacturing
10:00 a.m.: Euro-area July HCOB Manufacturing PMI
10:30 a.m.: UK July S&P Global/CIPS Manufacturing PMI
11:00 a.m.: Euro-area June Unemployment
12:00 p.m: Portugal June Industrial Production
Italy July Budget Balance

Corporate Events

Earnings include Pfizer, AMD, Caterpillar, Starbucks, Uber, Merck


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