July 5, 2023

“The US Dollar has been boosted by safe-haven demand amid renewed US-China trade concerns. The currency could see significant fluctuations in the latter part of the week due to two upcoming FOMC minutes later today and the US jobs report on Friday. Additionally, US May Factory, Durable Goods Orders data is due today.”

Tim Hallinan – Trading Director

Main Headlines

A foundation supported by Swiss pension funds has joined a legal case against the acquisition of Credit Suisse by UBS, aiming to challenge the exchange ratio of the transaction. The Ethos Foundation announced its decision to back the Lausanne-based legal start-up LegalPass in its legal action against the exchange ratio set during the bank’s acquisition in March. The current exchange ratio, which values Credit Suisse at CHF 3bn (£2.6bn), is being contested as Credit Suisse was valued at CHF 7bn (£6.1bn) at the close of trading on 17th March.

The Financial Conduct Authority (FCA) of Britain has stated that it is investigating whether hedge fund manager Crispin Odey is “a fit and proper person” to work in the financial services industry. The investigation follows allegations that Odey breached integrity rules by dismissing his firm’s executive committee for “an improper purpose.” The FCA’s CEO, Nikhil Rathi, informed the chair of Britain’s Treasury Committee that the regulator’s scrutiny of Odey Asset Management has been rigorous since 2020, and investigations were initiated in mid-2021. Odey has not held an approved senior manager role since 2020, according to the FCA.

GBP

Sterling is weaker than most major currencies in the early morning trade. Britain celebrates 75 years of its National Health Service (NHS) today, with members of the royal family, politicians, staff, and patients expressing pride in its history and determination to overcome current challenges and ensure its future. Launched on 5th July 1948 by a Labour government in the aftermath of the Second World War, the NHS’s objective was to provide equal access to the best and most advanced medical and allied services for everyone, regardless of their means, age, gender, or occupation.

EUR

Euro is stronger against Sterling and weaker against the Dollar this morning. The European Commission has proposed making amendments to the General Data Protection Regulation (GDPR), the landmark data privacy legislation in the European Union. The GDPR redefined privacy in the 21st century and granted Europeans the right to control access to their personal data, request corrections, and file legal complaints. It also introduced the “right to be forgotten,” allowing individuals to permanently delete their data from a company’s records. The proposed changes aim to refine the existing regulation.

USD

The Dollar is well bid against most major currencies overnight. The US dollar remained relatively steady this morning, hovering near the middle of its three-week range against major currencies. Traders are awaiting the release of the Federal Reserve’s June meeting minutes at 7 p.m. UK time. These minutes will provide clues on the likelihood of additional interest rate hikes. Key US data this week includes job openings numbers tomorrow and the official jobs report for June on Friday.

Markets

European stocks opened lower today as investors assessed indications that China’s economic recovery is faltering. The benchmark Stoxx 600 index dropped by 0.44%, with declines seen across all sectors, particularly in mining and tech stocks, which fell by around 1%. With the upcoming second-quarter earnings season, market sentiment has turned cautious, leading to relatively narrow movements in the index over the past three sessions. Asian-Pacific markets also traded lower, while US markets dipped as they reopened after the July 4th holiday.

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

8:45 a.m.: France May Industrial, Manufacturing Production
9:00 a.m: ECB’s Nagel speaks
9:00 a.m.: Turkey June CPI, PPI
9:00 a.m.: Spain May Industrial Production
9:15 a.m.: Spain June Composite and Services PMIs
9:45 a.m.: Italy June PMIs
9:50 a.m.: France June PMIs
9:55 a.m.: Germany June PMIs
10:00 a.m.: Euro-Area June PMIs
10:00 a.m.: ECB publishes Consumer Expectations Survey
10:00 a.m.: ECB’s Visco speaks
10:30 a.m.: UK June PMIs
11:00 a.m.: Euro-Area May PPI
1:00 p.m.: ECB’s Villeroy speaks
4:00 p.m.: US May Factory, Durable Goods Orders
8:00 p.m.: Fed publishes June 13-14 meeting minutes
Romania Rate Announcement
OPEC International Seminar in Vienna

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