Morning Report

June 13, 2023

“The dollar traded lower this morning as investors remained cautious ahead of a busy week of data, starting today with key US inflation readings and the Federal Reserve’s two-day monetary policy meeting. The US CPI report for May will be released, with predictions suggesting a further decrease from 4.9% in April to 4.1%. Later this afternoon, comments from the BoE’s Governor Bailey will be closely watched.”

Tim Hallinan – Trading Director

Main Headlines

The pace of US inflation is expected to have slowed down to its lowest level in over two years. However, persistent price pressures will likely lead the Federal Reserve to consider raising interest rates further. According to a consensus forecast compiled by Bloomberg, the consumer price index is projected to have increased by 4.1% in May compared to the previous year. This would be significantly slower than the 4.9% increase recorded in April and the lowest level since March 2021. On a monthly basis, consumer prices are estimated to have risen by only 0.1%.

UK wage growth accelerated in the three months leading up to April, driven by a rise in employment. This highlights the strength of the job market but also poses a challenge for the Bank of England in tackling inflation. Average private sector wages (excluding bonuses) were 7.6% higher than the previous year during that period, marking the fastest pace of growth outside the coronavirus period. Average public sector wages saw a 5.6% increase. Overall, annual growth in total pay, including bonuses, reached 6.5%, surpassing analysts’ expectations.


Sterling is well bid against most major currencies this morning. The CEO of a UK battery manufacturer has warned that they might relocate their planned factory to another country unless the UK matches the subsidies provided by the EU and the US. The CEO believes that the UK requires additional financial support to remain competitive in the global clean energy subsidy race. Additionally, the chair of the UK regulator for the accounting profession suggests that major accounting firms should raise the pay for junior auditors to attract young talent. The EU’s Brexit negotiator has cautioned that trade barriers between the UK and the EU are likely to deepen.


Euro is stronger against the dollar and weaker against sterling this morning. Despite an economic downturn in the region, manufacturers worldwide are acquiring more European factories to address geopolitical and supply chain concerns and bring their operations closer to customers. France is rallying support for a global levy on greenhouse gas emissions from the shipping industry ahead of an upcoming summit hosted by Emmanuel Macron. Silvio Berlusconi, the former Italian Prime Minister who served four times despite various scandals, has passed away at the age of 86. He died at the San Raffaele hospital in Milan, where he was being treated for a lung infection related to leukaemia.


The dollar is weaker than most major currencies in the early morning trade. Infineon, the largest supplier of silicon chips to the automotive industry, is contemplating moving more of its manufacturing operations to the United States to comply with recently enacted legislation aimed at boosting the US semiconductor industry. Google will be hit with an antitrust complaint from the EU as soon as tomorrow, which could lead to new fines and hurt its ad tech business model. The US FTC sued Microsoft to block the closing of its Activision takeover. Defaults in the US junk loan market, totalling $1.4 trillion, have risen significantly this year due to the Federal Reserve’s aggressive campaign of interest rate hikes, which puts pressure on companies with “floating” borrowing costs.


Stocks rose amid optimism that the Federal Reserve will pause its tightening campaign and as a report that China is considering measures to stimulate the economy boosted sentiment. Technology and mining stocks led the gains in Europe, while contracts for equity US benchmarks climbed after the Nasdaq 100 and the S&P 500 closed at the highest levels since April 2022.

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

11:00 a.m.: Germany June ZEW Survey
11:00 a.m.: BOE’s Greene speaks
12:00 p.m.: ECB’s De Cos speaks
12:00 p.m.: US May NFIB Small Business Optimism
2:30 p.m.: US May CPI
4:00 p.m.: BOE’s Bailey speaks
5:00 p.m.: BOE’s Dhingra speaks
FOMC begins two-day meeting

Corporate Events

Earnings include Colruyt
Bloomberg New Economy Gateway Africa held in Morocco through Wednesday


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