Morning Report

February 13, 2022

“Investors are cautious this morning as they monitor global events and avoid making major investments before this week’s significant happenings, US Consumer Price Index (CPI) data tomorrow and US Retail Sales on Wednesday. Without any major economic data releases, market movements will likely be influenced by perceived risks for the rest of the day.”

Sam Cornford, Partner – Head of Trading


Main Headlines

In the latest development in the ongoing tensions between the United States and China, US military fighter jets shot down an octagonal object over Lake Huron, according to a statement from the Pentagon. This marks the fourth flying object to be shot down by the US in just over a week. The Chinese foreign ministry claimed to have no knowledge of the recent incidents.

In the UK, the country’s largest nursing union has warned of a mass exit of young staff from the profession, with tens of thousands expected to leave. This comes as NHS leaders support calls for ministers to meet with unions to agree on a pay deal and prevent future strike action. The Royal College of Nursing revealed that 43,000 nurses have quit the profession in the past five years, which nearly equals the number of currently vacant nursing posts in NHS England.



Sterling is weaker than most major currencies in the early morning trade. In response to the recent incursion of a suspected Chinese surveillance balloon into US airspace, the UK Defense Secretary, Ben Wallace, announced that the country would be conducting a review of its security measures. Wallace stated that the review would help determine if changes need to be made to the surveillance of British airspace.


Euro is well bid against most major currencies overnight. The European Commission has recently released its winter forecasts, which indicate that Europe’s economy is expected to avoid falling into a recession this year, with lower-than-expected inflation. The Commission has revised its growth forecasts for 2023, now predicting a rise of 0.9% in eurozone GDP, compared to the previous prediction of 0.3%. The European Union is expected to grow by 0.8%.


The dollar is stronger against sterling and weaker against euro this morning. The greenback has edged towards a five-week high against major currencies, with the Japanese yen slipping, as investors increase their bets on the Federal Reserve keeping monetary policy tight for longer. The release of US consumer price data tomorrow will be a key event this week, with a strong reading potentially driving expectations for tighter monetary policy from the Fed and sending the dollar higher.



On the markets front, global shares have steadied, with the dollar rising, ahead of the US inflation data release. In Europe, shares have risen, driven by gains in industrial and defense stocks, pushing the STOXX 600 index up 0.3%. US stock index futures have risen between 0.1-0.2%. Yields on 10-year Treasuries have reached five-week highs of 3.75%, having jumped 21 basis points last week, while two-year yields have hit 4.51%. The recent news of another airborne object being shot down by the US has added to the geopolitical uncertainty.


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

8:00 a.m.: Turkey Dec. Current Account Balance
8:30 a.m.: Switzerland Jan. CPI
11:00 a.m.: European Commission publishes economic forecasts
11:30 a.m.: Germany to sell bills
2:00 p.m.: Fed’s Bowman speaks
2:50 p.m.: France to sell bills
5:00 p.m.: ECB’s Centeno speaks

Corporate Events

Earnings include Arista Networks, Arch Capital, Michelin, FirstEnergy, Blue Owl Capital, SolarEdge, Palantir


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