Morning Report

February 24, 2023

“The recent release of robust economic data in the US and the hawkish language used by Federal Reserve officials this month has led to the dollar reversing some of its losses from the start of the year. This shift in sentiment among investors reflects their understanding that the Fed is likely to maintain its course of gradually tightening monetary policy over a more extended period.”

Tim Hallinan – Trading Director

Main Headlines

A severe winter storm swept across several US states on Thursday, causing blizzard conditions, bitter cold, and gusty winds, leaving almost one million people without power. Michigan was hit particularly hard, with more than 820,000 homes and businesses affected by power outages due to one of the worst ice storms seen in decades. The accumulation of ice, approximately three-quarters of an inch thick in some areas, caused extensive damage to power infrastructure, leading DTE to report “extreme amounts of damage.”

Despite the cost-of-living crisis, UK consumer confidence has rebounded to its highest level in nearly a year, according to research group GfK. The group’s index of consumer confidence, which measures how people view their personal finances and economic prospects, rose by seven points to -38 in February. This reading beat the consensus forecast of -43 and was the highest level since April 2022 for the index, which had fallen to a near-record low in January. However, the measure also indicated that most respondents still reported a decline in confidence.


Sterling is well bid against most major currencies this morning. UK local government employees have been offered a wage increase of over 20 percent for the lowest-paid employees over two years, totalling about 1.5 million workers. This development puts increased pressure on ministers to make more generous offers to other public sector workers, including striking teachers and NHS staff. Imports of salad vegetables to the UK have decreased by at least half, highlighting the scale of the shortages facing households.


Euro is weaker than most major currencies in the early morning trade. Hungary’s Prime Minister Viktor Orban has stated that additional talks between parliamentary groups are necessary before lawmakers can vote on the ratification of Finland and Sweden’s NATO membership bids. These discussions are set to begin next Wednesday. The European Union’s two largest policy-making institutions have banned the popular short video-sharing app, TikTok, from staff phones due to concerns about cybersecurity and user data.


The dollar is stronger against euro and weaker against sterling this morning. The decision by Vladimir Putin to suspend Russia’s participation in the last remaining arms control agreement with the United States has raised concerns about the potential for uncontrolled nuclear proliferation. The largest producers in the US shale oil and gas sector have reported record profits for 2022, despite warning of persistent cost inflation that is putting pressure on the industry. These companies benefited from outsized profits last year after energy prices surged following Russia’s invasion of Ukraine.


European stocks rose, while US index futures and Asian equities fell, as investors hunted for pockets of value amid hawkish central banks, disappointing earnings and further power consolidation in China. The dollar gained before data on the Federal Reserve’s preferred inflation measure. The Stoxx Europe 600 Index climbed for a second day. Contracts on the S&P 500 and Nasdaq 100 slipped at least 0.2% each. Chinese technology stocks led a selloff in Asia amid signs price wars and cash burns are undermining profits.

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

8:00 a.m.: Germany 4Q GDP
8:00 a.m.: Sweden FSA publishes capital requirements for Swedish banks
9:00 a.m.: Spain Jan. PPI
9:00 a.m.: Sweden Feb. Economic Tendency Survey
10:00 a.m.: Austria Feb. Unicredit Bank Manufacturing PMI
2:30 p.m.: US Jan. PCE Deflator, Personal Income
5:30 p.m.: BOE’s Tenreyro speaks
7:00 p.m.: Baker Hughes US rig count
Russia’s invasion of Ukraine hits the one-year mark

Corporate Events

Earnings include Holcim, BASF


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