Morning Report

August 08, 2023

“The British Retail Consortium has just released its monthly Retail Sales Monitor report, showing an actual figure of 1.8%, marking a 12bps decrease from the forecast. Germany’s most recent CPI report was published earlier this morning, showing a rate of 0.3% in line with expectations. Lastly, we are anticipating the US Trade Balance report for this month, with a projected value of -$65.1 billion.”

Sam Cornford, Partner – Head of Trading

Main Headlines

President Joe Biden signed a law on Monday for the US-Taiwan “21st Century” trade plan. He expressed reservations about specific parts of the law that involve sending trade deal drafts to Congress, indicating that he will not consider them binding if they undermine his constitutional authority to negotiate with foreign partners. In other news, a federal appeals court stopped a part of Biden’s student debt relief plan, blocking a rule meant to streamline loan forgiveness for students deceived by schools. The 5th US Circuit Court of Appeals in New Orleans, prompted by a for-profit college group, paused the rule until a November appeal hearing. The new regulation enhances debt relief options for fraud cases and establishes an Education Department process to forgive loans for groups of affected students.

British food price inflation should decrease to approximately 10% later this year, but further reduction is necessary for the overall consumer price inflation to reach the 2% target, stated BoE Chief Economist Huw Pill. Food and drink price inflation surged following the Russia-Ukraine conflict to the highest rate since 1977, and in June it remained nearly 10 percentage points higher than the overall CPI. In other news, the UK government has raised security concerns about EDF, a French state-owned utility company, purchasing General Electric’s nuclear turbine business. The government has issued an order for both companies to fulfil specific security demands, including physical and information security measures, and governance safeguards for sensitive information. This comes after Britain’s antitrust regulator cleared EDF’s bid to acquire the GE Steam Power business in May 2023.


Sterling is weaker than most major currencies in the early morning trade. This morning, the British Retail Consortium issued its monthly Retail Sales Monitor report, tracking shifts in same-store sales values. Recent actual figures have consistently fallen short of forecasts, and this month continued the trend, with the actual figure dropping by 12 basis points below the forecast to 1.8%.


The Euro is stronger against Sterling and weaker against the Dollar this morning. Today, Destatis published Germany’s latest CPI report, capturing consumer price changes. Recent reports have consistently matched forecasts, including this month’s forecasted figure of 0.3%. Additionally, the French Ministry of Economy and Finance released their trade balance report, surpassing the forecast by 1.3 billion to reach -6.7 billion. This builds on a consistent upward trend from previous months.


The Dollar is well bid against most major currencies this morning. Today, the National Federation of Independent Business issued the Small Business Index report, gauging economic conditions for small businesses. Previous months have shown consistent figures relative to forecasts, and the trend is being tested again with the current forecast at 91.2. The US Bureau of Economic Analysis will also release the monthly trade balance report. Recent reports have demonstrated stability, and we will see if this month’s projected -65.1Bn will maintain the trend. Furthermore, Federal Open Market Committee Member Harker will speak at a Philadelphia Business Journal event. These speeches often provide insights into future monetary policy, potentially causing market fluctuations.


Bonds gained along with the dollar on Tuesday, while stocks fell as fresh concerns around China’s economic recovery and the state of US banks sent investors scurrying for havens. Miners and carmakers led a drop in the Stoxx Europe 600 index after China’s trade plunged in July as slowing global demand clouded the outlook for exports, while domestic pressures weighed on imports. There were also further signs of trouble in China’s ailing real estate sector: Country Garden Holdings Co.’s stock and bonds plunged, with short-sellers swarming over China’s sixth-largest developer by sales, as scrutiny intensified over its operations and ability to meet debt payments.

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

8:00 a.m.: Germany July CPI
8:45 a.m.: France June Trade Balance
10:00 a.m.: ECB Consumer Expectations Survey
12:00 p.m.: US July NFIB Small Business Optimism
2:15 p.m.: Fed’s Harker speaks
2:30 p.m.: Fed’s Barkin speaks
2:30 p.m.: US June Trade Balance
4:00 p.m.: US June Wholesale Inventories
US Treasury quarterly refunding auctions through Thursday

Corporate Events

Earnings include InterContinental, abrdn, Aramark, Celsius, Coupang, Datadog, Duke Energy, Eli Lilly, Horizon Therapeutics, Lyft, Rivian, UPS, Warner Music, Zoetis


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