Morning Report

July 21, 2023

“UK consumer confidence worsened in June, but retail sales for May outperformed expectations, rising by 0.7% compared to the forecasted 0.2%. As a result, Sterling strengthened slightly in early trading. No other major releases are expected for the rest of the day.”

Sam Cornford, Partner – Head of Trading


Main Headlines

EY’s auditors outside the US are experiencing a higher number of quality inspections failure by American regulators, according to the firm’s internal estimates. US authorities are concerned about the impact of the coronavirus pandemic on global standards, leading them to push for improvements. In 2021, deficiencies were found in 21% of audits conducted by EY for US-listed companies. However, last year, the figure jumped significantly to 38%.

British retail sales exceeded expectations in June, boosted by unusually hot weather and a rebound in food sales following a dip in the previous month due to public holidays disrupting spending patterns. Official figures from the Office for National Statistics revealed that retail sales volumes in June were 0.7% higher than in May, surpassing the 0.2% forecasted by economists. Additionally, sales volumes were 1.0% lower than the previous year, performing better than the predicted 1.5% decline.



Sterling is weaker than most major currencies in the early morning trade. The Conservatives, led by Rishi Sunak, faced a significant political upset as they lost one special election to Labour and another to the Liberal Democrats. While they managed to hold onto Boris Johnson’s former parliamentary seat, it was an unexpected blow for the Prime Minister. Speculations suggest that Sunak may consider scheduling the next general election in November 2024 to allow more time for the economy to recover.



Euro is stronger against Sterling and weaker against the Dollar this morning. Josep Borrell, the European Union’s foreign policy chief, proposed a new plan to offer “sustainable and predictable” military support to Ukraine. The blueprint outlines the allocation of €20 billion over the next four years to reimburse member states partially for their supplies to the war-torn nation, which is currently facing a counteroffensive against Russian troops. The financial support will cover both lethal and non-lethal equipment, adhering to the neutrality principle maintained by some EU member states, fulfilling a security commitment agreed upon at a recent summit.



The Dollar is well bid against most major currencies overnight. US Transportation Secretary Pete Buttigieg expressed his willingness to take a firm stance with airlines when necessary as the Biden administration aims to enhance consumer protections for passengers. The administration is committed to ensuring airlines fulfill their obligations, and they will enforce compliance. Airlines have clashed with the administration on various issues, including flight delays, passenger rights, and landing slots. The Federal Aviation Administration’s air traffic control staffing has been a point of contention between carriers and federal audit reports.



European markets opened flat, with investors digesting corporate earnings reports and keeping an eye on an essential Spanish election over the weekend. The pan-European Stoxx 600 remained unchanged during early trade. Tech stocks declined by 1.6%, continuing their previous session’s slide, while insurance stocks gained 0.8%. In Asia-Pacific, shares fell in response to Japanese inflation figures, with the core consumer price index experiencing a slight increase in June. US stock futures made fractional gains in early premarket trade following the Dow Jones Industrial Average’s ninth consecutive day of gains.


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

8:00 a.m.: UK June Retail Sales
8:00 a.m.: UK June Public Sector Net Borrowing, Public Finances
8:00 a.m.: Lithuania June Industrial Production
9:00 a.m.: Switzerland June M3 Money Supply
9:00 a.m.: Spain May Total Mortgage Lending, Approvals
10:00 a.m.: Poland June Retail Sales
10:30 a.m.: Slovenia June PPI
11:00 a.m.: Iceland July CPI
11:00 a.m.: Iceland June Wage Index
12:00 p.m.: Latvia June PPI
12:00 p.m.: Ireland June PPI
12:30 p.m.: Russia Central Bank Rate Decision
France June Retail Sales


Corporate Events

Earnings include Danske Bank, Norsk Hydro, Stora Enso, SCA, SSAB, Thales, Schindler, Skanska, Wartsila, Finnair, CIE Automotive, Evolution, Arcelik, Nokian Renkaat, TietoEVRY, Sinch


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