Morning Report

August 10, 2023

“Today’s focus will be on the US CPI release this afternoon. Expectations are for a slight increase from 3%, to 3.3% in July, with the core rate expected steady at 0.2%. Following this, comments from Fed member Harker will be closely watched”  

Sam Cornford, Partner – Head of Trading 

Main Headlines 

President Joe Biden signed an executive order on Wednesday restricting new U.S. investments in sensitive Chinese technologies, including computer chips. The order allows the U.S. Treasury secretary to limit investments in Chinese entities in semiconductor, quantum tech, and specific AI sectors, while also requiring government notification in other tech areas. In other news, to counter the escalating use of AI by hackers, the White House initiated a multi-million-dollar cyber contest to spur use of artificial intelligence to find and fix security flaws in U.S. government infrastructure. This two-year contest, overseen by DARPA, offers approximately $20 million in rewards.  

The House of Lords is launching an inquiry into electric vehicles, examining the government’s plan to phase out fossil-fuel models, EV charging, and end-of-life disposal. Focusing on the UK’s car and van decarbonization objectives, the committee seeks to understand challenges in meeting targets, especially in passenger cars. Elsewhere, a CDP and Bain & Company report shows that over 2/3 of UK corporate emissions lack decarbonization targets. Moreover, over 20% of firms with 2030 goals are off course. The situation may be direr due to non-disclosure and target absence. As UK, US, and EU regulators push for mandatory emissions disclosure, UK companies’ sluggish advancement conflicts with impending regulations. 


Sterling is stronger against the Dollar and weaker against the Euro this morning. Earlier, the Royal Institution of Chartered Surveyors released their house price balance report, which is a leading indicator of housing inflation. The forecast was reported at -50%, which is a steep decrease from previous months, and the actual figure was even lower at -53%, which means that over half of the housing market reported a fall in prices. 


The Euro is well bid against most major currencies overnight. German inflation continues to decline but remains significantly above the European Union’s 2% goal. In July, consumer prices in Germany increased by 6.5% over the year, while core inflation (excluding food and energy) was at 5.5%, down from June’s 5.8%. A recent study by the Ifo economic institute revealed that Germany’s middle class shrank from 65% to 63% of the population between 2007 and 2019, lagging 13 other European countries in its share. We also had the most recent Economic Bulletin from the European Central bank released this morning. 


The Dollar is weaker than most major currencies in the early morning trade. Today, the US Bureau of Labor Statistics will release the CPI reading, expected to increase slightly to 3.3%, alongside the Core CPI figure, excluding food and energy, forecasted unchanged at 0.2%. Recent months have seen a gradual decline in the headline reading. The Department of Labor will also release Unemployment Claims data, forecasted at 231K, showing a slight decrease over the past month with a 20K overall deviation. Additionally, Fed member Patrick Harker will discuss employment at a Federal Reserve online event, where subtle hints about future monetary policy might lead to volatility. 


Global stocks climbed while Treasuries traded flat as investors awaited US inflation data for cues on the Federal Reserve’s next steps. European gas prices advanced on concern about potential industrial action in Australia. The Euro Stoxx 50 index added 1.2% and US equity futures pointed to gains after a tech-led drop in the previous session. Ten-year and two-year US government debt yields were little changed, while most currencies in a group of G-10 counterparts strengthened against the greenback, led by the New Zealand and Australian dollars. 

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

8:00 a.m.: Denmark, Norway July CPI
9:00 a.m.: Czech July CPI
9:00 a.m.: Turkey June Industrial Production
10:00 a.m.: ECB publishes Economic Bulletin
10:00 a.m.: Italy July CPI
12:00 p.m.: Serbia Rate Decision
12:00 p.m.: Ireland July CPI
2:30 p.m.: US July CPI; Jobless Claims
5:00 p.m.: Fed’s Daly speaks
8:00 p.m.: US July Budget Statement 

Corporate Events 

Earnings include Alibaba, Deliveroo, Entain, Orsted, Ralph Lauren 


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