Morning Report

Monday 2 August, 2021

“The dollar strengthened a little but held steady just above a one-month low, with traders not making moves on the currency until monthly US jobs data is released later this week. The Fed’s comments last week that rate rises remain distant and jobs needed to make progress across the economy have encouraged caution amongst traders.”

Sam Cornford, Partner & Head of Trading

Main Headlines

US senators are pushing to wrap up President Biden’s Infrastructure Bill this week, as it finally gained bipartisan support in the Senate, where Republicans and Democrats agreed on the text of the legislation for a $1trn infrastructure project. Majority leader Chuck Schumer kept the Senate open through the weekend to press for the legislation. The Bill is now expected to move quickly with Mr Schumer stating that processing relevant amendments and passing the bill should only take a matter of days. The Bill is unlikely to pass through the House of Representatives until September, after the summer recess.

British firms are poised to boost hiring and wages after Covid-19 restrictions were dropped in the UK in July. Optimism in this arena is due to continuing strong business confidence, which has dipped only marginally from its highest level since 2018 according to Lloyds Bank Business Barometer. Unsurprisingly, business confidence is highest in London compared to other regions of the country, whilst the greatest portion of new roles are set to be found in the transport and hospitality sector. A quarter of UK firms expect wages to rise by at least 2% and 39% of firms expect to increase prices in goods and services.


Sterling is higher against the dollar and lower against the euro overnight. The U.K. aims to deliver booster shots to 32 million people in September, in an effort to continue reducing coronavirus variants and cases in the country. British businesses are set to come under further pressure to appoint more women to boards as ministers plan to relaunch a review later this year in an effort to ensure women make up at least 40% of board directors in UK companies. Influential MP, Andrew Brigden, has stated that Parliament should be recalled from its summer recess to vote on the contentious issue of vaccine passports, if Boris Johnson plans to introduce them.


The euro is well-bid against most majors in early morning trade. As vaccine numbers in Europe drop, governments are coming up with ways to ensure their populations get vaccinated. The French government introduced health passports for the general population, meaning citizens must show they have been vaccinated before entering public places such as restaurants. Further, it is now mandatory by law for French health workers to get vaccinated. Germany and Greece are insisting that those entering the country show proof of vaccination and are offering incentives such as free meals to German citizens if they have been vaccinated.


The dollar is lower against most majors overnight. The U.S. attributed responsibility to Iran for last week’s attack on the Mercer Street, an Israel-linked oil tanker sailing off Oman, which killed two people. In the State Department statement, the US government promised an “appropriate response” was forthcoming. Antony Blinken’s warning came after Israeli PM Naftali Bennett and U.K. Foreign Secretary Dominic Raab both claimed that Iran was responsible for the attack. The Chinese government wants to have discussions with the Securities & Exchange Commission following the decision to halt US IPOs of Chinese companies last week.


Asian stocks and U.S. futures rallied Monday as some of the concerns over China’s regulatory crackdown eased and progress on a U.S. infrastructure spending plan aided sentiment. Crude oil slid. Equities jumped in Japan and Australia, where Afterpay Ltd. surged after digital-payments platform Square Inc. agreed to acquire the buy-now, pay-later company. S&P 500 and Nasdaq 100 contracts climbed as a $550 billion infrastructure package steps closer to passage in the Senate this week. European stock futures advanced. Hong Kong and China stocks rose, paring some of last week’s rout sparked by Beijing’s clampdown on everything from technology to private education and property. The nation also faces a Covid-19 spike and signs of slowing economic growth, spurring bets on monetary easing and a rally in sovereign debt. Ten-year U.S. Treasury yields were steady.

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

8:00 a.m.: Germany June Retail Sales

8:30 a.m.: Sweden July Swedebank Manufacturing PMI

8:30 a.m.: Switzerland July CPI, June Retail Sales

9:00 a.m.: Netherlands July NEVI Manufacturing PMI

9:15 a.m.: Spain July Markit Manufacturing PMI

9:30 a.m.: Switzerland July Manufacturing PMI

9:45 a.m.: Italy July Markit Manufacturing PMI

9:50 a.m.: France July Markit Manufacturing PMI

9:55 a.m.: Germany July Markit/BME Manufacturing PMI

10:00 a.m.: Euro-Area July Markit Manufacturing PMI

Swedish bankruptcy data

Corporate Events

Earnings include Mitsubishi UFJ, NXP, Ferrari, OCI

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