Morning Report

August 10, 2021

“The dollar was buoyant today as a run of strong US job figures solidified expectations the Fed could soon start tapering its massive Covid-driven stimulus. US Treasury yields spiked to three-week highs as surprising strong job openings on top of better-than-expected employment gains in July added to the narrative of an improving labour market.”

Tim Hallinan – Trading Director

Main Headlines

The Pentagon plans to make Covid vaccines mandatory for US troops by mid-September, as the country grapples with a rise in cases caused by the spread of the contagious Delta variant. “To defend this nation, we need a healthy and ready force,” wrote Lloyd Austin, defence secretary, in a memo to US forces. Austin said he would bring the date forward if the US Food and Drug Administration were to grant full approval to any of the existing vaccines before then. The BioNTech/Pfizer vaccine is expected to receive full approval early next month.

The UK’s financial regulator has imposed its first fine on an adviser it described as “seriously incompetent” for retirement savings transfer recommendations to members of the British Steel Pension Scheme. The FCA fined Geoffrey Edward Armin of Derbyshire-based Retirement and Pension Planning Services £1.3m over the advice given to 422 customers, including 183 BSPS steelworker members. From 2017-2018 around 7,700 members of the BSPS received advice to transfer out to personal pensions. In nearly half of the cases reviewed by the FCA, this advice appeared to be unsuitable. The compensation bill for poor pension advice related to the Armin case could be more than £20m.


The pound is unchanged against the dollar and lower than the euro this morning. The chief UK financial regulator is examining introducing new rules that would allow it to block banks from closing high street branches to help ensure consumers and businesses are still able to use cash. The Treasury said in a consultation last month that it planned to use legislation to give broad powers to the FCA to guarantee “reasonable” public access to cash facilities, adding the FCA would have “discretion” to set out how standards should be met. Senior regulators have since told lenders and industry groups that they believe in-person banking services should remain important alongside ATMs and other initiatives such as making cashback more widely available.


The euro is stronger than most majors overnight. Italy’s antitrust authority AGCM will investigate McDonald’s terms and conditions in its agreements with franchise operators following several complaints. The AGCM move could put the US fast-food chain at risk of a fine of as much as 10% of its global turnover if it is found guilty of breaching Italian antitrust rules. The group made $19.2 billion in revenues in 2020. The Italian competition watchdog said that based on the available information there appeared to be a relationship of economic dependence between the store operators and McDonald’s.


The dollar is weaker than the euro and unchanged against the pound in the early morning trade. US lawmakers are split over how to tax and regulate cryptocurrency transactions, in a dispute that threatens to slow the passage of Joe Biden’s $1tn bipartisan infrastructure bill. The White House has called for closing the so-called tax gap — the difference between taxes owed to the US government and those actually paid — through several measures, including requiring large cryptocurrency transfers to be reported to the Internal Revenue Service. Cryptocurrency reporting requirements could generate an additional $28bn for the US Treasury. But lawmakers are sharply divided over the details of the reporting requirements, in a dispute that has crossed party lines, sparked outrage among investors and stymied passage of the wider infrastructure package.


Asian stocks drifted with U.S. futures Tuesday and commodity markets steadied as investors weighed talk of stimulus withdrawal and a resurgence in the delta variant. The dollar held overnight gains, while 10-year Treasury yields dipped. Equities rose in Japan, which reopened after a holiday, as well as in Hong Kong and China. U.S. futures edged lower. Earlier, the S&P 500 closed little changed, while the Nasdaq 100 ticked up. Crude oil pared a decline after it touched the lowest in three weeks on concern the delta strain will hamper demand growth. Gold was steady after Monday’s volatility and Bitcoin traded back around $46,000.

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

8:00 a.m.: Norway July CPI
9:30 a.m.: Sweden June industrial orders
10:30 a.m.: Bank of Italy releases banks and money monthly statistics
10:30 a.m.: Spain to sell bills
11:00 a.m.: Germany Aug. ZEW Survey
11:00 a.m.: U.K. to sell bonds
11:15 a.m.: Switzerland to sell bills
12:30 p.m.: ESM to sell bills

Corporate Events

Earnings include SoftBank, Coinbase, Porsche, Flutter, CEZ, HelloFresh, InterContinental Hotels, IWG, Hunter Douglas

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