Morning Report

February 27, 2023

“The US Dollar is maintaining its strength against other major currencies this morning, after making significant gains in response to strong PCE inflation data released on Friday. Later today, surveys on consumer and business sentiment in the Eurozone are due. Furthermore, investors will be closely monitoring the US economic calendar which includes data on Durable Goods Orders and Pending Home Sales for January.”

Sam Cornford, Partner – Head of Trading

Main Headlines

Pfizer is reportedly in preliminary talks to acquire Seagen, a drugmaker valued at around $30 billion, according to anonymous sources cited by the Wall Street Journal. The acquisition talks are in the early stages, and it is expected that Seagen would fetch a premium price. Last year, Merck was also in advanced talks to acquire Seagen for a deal worth over $40 billion, but the negotiations fell through.

Prime Minister Rishi Sunak is scheduled to hold face-to-face talks with European Commission President Ursula von der Leyen today to discuss the Northern Ireland Protocol. The two leaders will meet in the UK to tackle the “complex challenges” presented by the Brexit treaty. Deputy Prime Minister Dominic Raab suggests that a deal could be reached soon, as Sunak is reportedly close to striking an agreement.



Sterling is stronger against euro and weaker against the dollar this morning. The UK’s opposition Labour Party warns that the country’s economy could fall behind those of Poland, Hungary, and Romania by the end of the decade, based on an analysis of economic output per head since 2010. Labour Leader Keir Starmer intends to appeal to voters to back his party in the 2024 elections instead of the Conservatives, who have been in power since 2010.


Euro is weaker than most major currencies in the early morning trade. European Central Bank (ECB) President, Christine Lagarde, has stated that the ECB’s decision on rate hikes will be dependent on data, following a 50 basis points hike in March. If necessary, more hikes will be made to ensure that inflation returns to the 2 percent target in a timely manner, and Lagarde expressed her desire for inflation to remain sustainably at this level. According to Lagarde, inflation was expected to be transitory due to higher energy prices and supply bottlenecks. However, the Ukraine war has limited the supply of oil and gas, which has led to a rise in prices.


The dollar is well bid against most major currencies overnight. The US dollar is hovering near a seven-week high this morning, following strong economic data released last week and a rapid shift in expectations about the peak interest rates. Investors anticipate that the Fed will raise interest rates to about 5.4% by the summer, compared to their earlier projection of a peak of 4.9%. Friday’s data shows that the core measure of US personal consumption expenditures inflation rose to 4.7% year-on-year in January.



European markets are off to a positive start this morning, rebounding from their steepest decline of the year last week. As of 9:30 a.m. in London, the pan-European Stoxx 600 index is up 1%, with all sectors showing gains. Energy stocks lead the gains, with a 1.6% increase. Commerzbank is among the top performers, up 4.1% on its first day back in Germany’s blue-chip DAX index. Meanwhile, Asia-Pacific markets are mixed, and US equity futures are higher after Wall Street stocks also posted their steepest decline of 2023.


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

8:00 a.m.: Sweden Jan. Retail Sales
8:00 a.m.: Turkey Jan. Trade Balance
10:00 a.m.: BOE’s Broadbent speaks
10:00 a.m.: Eurozone Jan. M3 Money Supply
10:00 a.m.: Italy Feb. Consumer, Manufacturing Confidence; Economic Sentiment
11:00 a.m.: Eurozone Feb. Consumer, Economic Confidence
4:45 p.m.: ECB’s de Cos speaks
6:00 p.m.: ECB’s Lane speaks


Corporate Events

Earnings include Zoom, AES, Occidental Petroleum


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