Morning Report

June 14, 2023

“UK GDP improved in April, but Manufacturing and Industrial Production fell short. Despite this, GBPUSD remains attractive due to positive employment, inflation data, and signals of potential rate hikes from the Bank of England. All eyes are now on the FOMC rate decision and Powell’s speech later today.”

Tim Hallinan – Trading Director

Main Headlines

Today, the Federal Reserve is anticipated to maintain unchanged interest rates, breaking the trend of aggressive monetary policy tightening that began in March 2022. However, it should not be seen as a pivot or a pause. At the conclusion of their two-day meeting, policymakers might indicate potential future rate increases as they evaluate the trajectory of the economy, the stability of the financial system, and the trajectory of inflation.

New figures from the Office for National Statistics show that UK GDP grew by 0.2% in April, meeting expectations. This follows a contraction of 0.3% in March, resulting in a modest 0.1% expansion over the three-month period. The services sector contributed to the monthly GDP growth with a 0.3% increase, driven by a 1.0% growth in consumer-facing services. However, the production sector shrank by 0.3% in April, and construction output declined by 0.6%.


Sterling is well bid against most major currencies overnight. British wage growth surged, and employment rose in the three months leading up to April, fueling expectations of further interest rate hikes by the Bank of England to counter ongoing inflationary pressures. The unexpectedly strong labor market data, exceeding economists’ predictions, boosted the value of sterling and led to a decline in British government bond prices.



Euro is stronger against the Dollar and weaker against Sterling this morning. The EU made progress in improving working conditions for platform workers after months of deadlock. EU member states reached an agreement in Brussels on their negotiating stance with other EU institutions, granting certain rights to drivers and delivery riders. The agreement stipulates that platform workers must fulfil three out of seven criteria to be considered employees, including the ability to set their payment, decline work, and choose their appearance.


The Dollar is weaker than most major currencies in the early morning trade. Following softer-than-expected US inflation data, the dollar remained near a three-week low against the euro and a one-month low against sterling. The data reinforced the belief that the Federal Reserve will not raise interest rates later in the day. The dollar index was stable in Asian trading, having dipped to its lowest level since May 22. With the US consumer price index showing a 0.1% increase last month and a year-on-year increase of 4.0%, expectations for a rate hike have diminished.


European markets showed a mixed trend in the morning as investors anticipated the US Federal Reserve’s monetary policy decision. The benchmark Stoxx 600 index was slightly up by 0.23%, with various sectors experiencing both gains and losses. Automotive stocks rose by 0.7%, while travel stocks declined by 1%. In Asia-Pacific, markets also displayed mixed performance overnight, and S&P 500 futures traded with little change. Yesterday, Wall Street reacted positively to the release of May’s consumer price index, driving both the S&P 500 and the Nasdaq to reach new 52-week highs.

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

8:00 a.m.: UK April GDP, Industrial Production, Trade Balance
8:00 a.m.: Sweden May CPI
10:00 a.m.: Bulgaria May CPI
11:00 a.m.: Euro-Area April Industrial Production
12:00 p.m.: Portugal May CPI
2:30 p.m.: US May PPI
8:00 p.m.: FOMC Rate Decision
8:30 p.m.: Fed’s Powell speaks
IEA publishes oil market report
First day of St. Petersburg annual economic forum

Corporate Events

Earnings include Lennar
London Tech Week through Friday
VIVA Technology event in Paris through Saturday
Bloomberg New Economy Gateway Africa in Morocco


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