Morning Report

March 1, 2023

“The US dollar weakened in early morning trade, with China’s manufacturing sector expanding at an unexpectedly rapid pace, reaching its highest level since April 2012. The news led traders to turn to more risky assets and away from the typically safe-haven US dollar, reflecting renewed optimism in the market.”

Tim Hallinan – Trading Director

Main Headlines

Wall Street’s biggest asset managers, private equity firms, and brokers have expressed concerns about a potential backlash against sustainable investing, as annual reports filed in the past month show that acrimony over environmental, social, and governance principles has become a perceived threat to profits. A dozen major US financial companies, including BlackRock, Blackstone, KKR, and T Rowe Price, have added language cautioning that pressures such as “divergent views” or “competing demands” on ESG investing could harm financial performance.

The UK government risks failing to achieve its goal of decarbonizing the power sector by 2035 due to a lack of a clear and comprehensive delivery plan. The National Audit Office warns that ministers have made “little progress” on a long-term strategy for decarbonizing power, despite having planned to release one by October last year. The watchdog found that generators were being paid up to £62mn a day to cut output when supply outstripped demand and could not be stored, indicating that grid infrastructure is struggling to keep pace with changes to the power system.


Sterling is stronger against the dollar and weaker against euro this morning. Spain’s agriculture minister has said that Brexit has not fundamentally disrupted the country’s fruit and vegetable exports to the UK, despite salad shortages in British supermarkets and added costs for exporters. Tata Motors, the owner of Jaguar Land Rover, is seeking over £500mn of government aid for a new battery factory in Britain, a decision that could be pivotal for the future of the UK car industry.


Euro is well bid against most major currencies this morning. Italy’s Energy Minister announced that Italy plans to vote against European plans to ban the sale of new petrol and diesel cars within 12 years. Eleven EU member states have pledged to “strengthen cooperation” on nuclear energy to help Europe move away from carbon-emitting fossil fuels. The head of Denmark’s largest private industrial group has criticized policymakers for neglecting energy efficiency as a key tool to reduce emissions and focusing too much on the need to boost renewable power.


The dollar is weaker than most major currencies in the early morning trade. US President Joe Biden has stated that his budget proposal to Congress on March 9 will include some higher taxes, including on billionaires, but will not violate his promise not to raise rates on Americans earning less than $400,000 a year. Chipmakers seeking to receive money from a $39bn US federal fund designed to build a leading-edge US semiconductor industry must agree not to expand capacity in China for a decade, according to new commerce department rules.


European stocks ticked higher as a recovery in China helped offset a growing realization that policy makers are likely to stay hawkish for the coming months. The Stoxx Europe 600 Index added 0.2%, with miners and consumer products leading the gains, while real estate dropped. Futures for the S&P 500 and Nasdaq 100 erased earlier losses and climbed following data showing China’s economy bouncing back as it lifted Covid restrictions. An Asian equity benchmark advanced by the most since mid-January, supported by a surge of 4% in Hong Kong’s benchmark index.

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

8:00 a.m.: UK Feb. Nationwide House PX
8:30 a.m.: Sweden Swedbank/Silf Feb. Manufacturing PMI
8:30 a.m.: Hungary Jan. PPI
9:00 a.m.: Hungary’s Parliament Starts NATO Enlargement Debate
9:15 a.m.: Spain Feb. S&P Manufacturing PMI
9:30 a.m.: ECB’s Villeroy speaks
9:45 a.m.: Italy Feb. S&P Manufacturing PMI
9:50 a.m.: France Feb. S&P Manufacturing PMI
9:55 a.m.: Germany Feb. Unemployment Change, S&P Global/BME Manufacturing PMI
10:00 a.m.: Euro-area Feb. S&P Global Manufacturing PMI
10:00 a.m.: Norway Feb. DNB/NIMA PMI Manufacturing
10:30 a.m.: UK Jan. Mortgage Approvals, M4 Money Supply; Feb. S&P Global/CIPS Manufacturing PMI
11:00 a.m.: ECB’s Nagel speaks
11:00 a.m.: BOE’s Bailey speaks
2:00 p.m.: Germany Feb. CPI
4:00 p.m.: ECB’s Visco speaks
Bundesbank publishes annual report

Corporate Events

Earnings include Reckitt, Cellnex, Dollar Tree, Kohl’s, Salesforce, Lowe’s, RBC


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