Morning Report

July 17, 2023

“Last week’s data revealed US core-CPI inflation in June dropped to 4.8%, which was below the anticipated forecast of 5.1%, indicating the possibility of more aggressive rate cuts in the US next year. This week, the focus will be on UK CPI inflation data for June, as well as US retail sales and industrial production figures for the same period.”

Sam Cornford, Partner – Head of Trading


Main Headlines

Microsoft strongly criticised the US Federal Trade Commission’s request to halt its $69 billion deal to acquire Activision, urging an appeals court to reject it. The agency had asked the 9th Circuit Court of Appeals to require a delay in finalising the transaction while considering the FTC’s broader appeal. Microsoft argued that the agency’s delayed filing in federal court made it inappropriate to request a delay at such a late stage.

Finance executives at leading British companies have become more cautious due to high inflation and rising interest rates, anticipating a slowdown in hiring and wage growth. A quarterly survey by Deloitte indicates a significant shift from a +25 percentage point difference between optimistic and less optimistic CFOs to a -10 percentage point difference. The survey also suggests signs of cooling in the job market, with CFOs indicating reduced recruitment difficulties and a slowdown in wage growth.



Sterling is stronger against the Dollar and weaker against Euro this morning. The increase in interest rates has resulted in a loss of over £2 trillion in household wealth in the UK over the past year due to declining house prices and bond values, negatively impacting pensions. However, the Resolution Foundation think-tank suggests that younger individuals could benefit from the partial reversal of the long-standing increase in household wealth. The Bank of England has raised borrowing costs continuously since December 2021, and further rate hikes are expected to combat high inflation compared to other G7 nations.



Euro is well bid against most major currencies overnight. The French government has submitted a spending plan to parliament for 2024, aiming to cut spending by €4.2 billion ($4.7 billion) while prioritizing investments for the green transition. Adjusted for inflation, overall spending is set to decline by 3.5%. The largest reduction is allocated to helping households and businesses cope with rising fuel and energy costs. France aims to achieve a budget deficit of 4.4% of gross domestic product in 2024, down from the 4.9% target for this year, and ultimately aims to bring it below the 3% limit set by European Union rules by the end of President Emmanuel Macron’s second term in 2027.



The Dollar is weaker than most major currencies in the early morning trade. Despite the shift to wetter weather in the US Corn Belt and the revelation of higher-than-expected corn plantations, Chicago-traded corn futures have held up relatively well. Following a historic 21% drop in CBOT December corn prices in late June, the market stabilised. Corn prices rose 1.6% in the week ending July 11 in anticipation of a yield reduction by the US Department of Agriculture, which adjusted US corn yield on July 12 due to dry weather in June.


European stock markets opened lower today after a positive streak faltered. The regional Stoxx 600 index declined by 0.5%, with most sectors experiencing losses. Household goods stocks dropped by 1.95%, while insurance stocks inched up by 0.2%. According to Eikon data, the Stoxx recorded its strongest week since March with a 2.94% gain last week. Luxury Swiss retailer Richemont suffered an 8.6% decline in its stock price this morning following sales figures indicating a slowdown in US demand, although there was a significant rebound in Asia.

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

10:00 a.m.: Italy June CPI
10:15 a.m.: ECB’s Lagarde speaks
10:30 a.m.: ECB’s Lane, Vasle speak
11:00 a.m.: Croatia June CPI
11:30 a.m.: Germany, Netherlands to sell bills
2:00 p.m.: Poland June CPI
2:15 p.m.: ECB’s Elderson, Vujcic speak
G-20 finance ministers and central bankers in India
Japan markets closed

Corporate Events

Earnings include Evergrande, Sagax, Orion, HDFC Bank


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