Morning Report

March 8, 2023

“Today, all eyes will be on the second and final part of Chair Powell’s testimony, along with remarks from ECB President Lagarde. The updated reading of Eurozone Q4 GDP is also forecast to be revised lower to +0.0% from +0.1%. Meanwhile in the US, the latest JOLTS job openings data for January will be released.”

Tim Hallinan – Trading Director

Main Headlines

Volkswagen has decided to delay its planned battery plant in eastern Europe and instead focus on building a similar facility in North America due to the estimated €10bn in incentives it could receive from the US. This decision is a result of the $369bn package of subsidies and tax incentives for green technology introduced by President Joe Biden, which is attracting European companies to the US. Volkswagen has informed EU officials that it expects to receive €9bn-€10bn in subsidies and loans from the US President’s Inflation Reduction Act and other schemes over the lifetime of the factory.

Heathrow Airport will be reducing its landing fees due to a faster than expected recovery in demand for flying after the pandemic, and successful lobbying by airlines against a significant increase in charges. The UK aviation regulator has announced that landing fees at Heathrow should decrease from £31.57 per passenger to £25.43 from next year. These charges are usually passed on to passengers through ticket prices. The UK aviation regulator made this decision in the aftermath of the pandemic and the fall in passenger numbers.


Sterling is well bid against most major currencies this morning. Chancellor of the Exchequer Jeremy Hunt is considering giving British firms extra tax relief on investment spending as part of measures to boost economic growth in the spring budget. Hunt is reviewing a range of potential changes to the UK’s capital-spending allowances to encourage business investment. Meanwhile, MPs have stated that the roll-out of pandemic employment support schemes by the tax authorities has resulted in the loss of billions of pounds worth of taxpayers’ money due to fraud and error.


Euro is weaker than most major currencies in the early morning trade. Italy’s celebrations of International Women’s Day today may be affected by a drought that has caused a one-third reduction in the mimosa harvest. The European Commission is expected to propose that EU governments set their own deficit-cutting goals when they draft budgets for 2024, continuing its idea of country-specific debt reduction paths.


The dollar is stronger against euro and weaker against sterling this morning. Following data releases showing the central bank’s struggles to cool the US economy despite a year-long campaign of monetary tightening, the Fed chair has signalled a willingness to increase rates to combat persistent price rises. The Biden administration has also sued to block JetBlue Airways’ $3.8 billion purchase of Spirit Airlines, citing concerns that the deal would reduce competition and increase air fares for consumers.


Global stock markets struggled today, after comments from Federal Reserve Chair Jerome Powell boosted interest rate wagers, drove up Treasury bond yields and revived fears that the world’s largest economy will not be able to dodge a recession. Europe’s Stoxx 600 equity benchmark opened about 0.3% weaker, after an Asian stocks gauge fell more than 1%, with losses driven primarily by commodity shares. US equity futures traded around flat, after the underlying S&P 500 and Nasdaq indexes posted their biggest losses in two weeks. As the dollar extended the previous day’s 1% gain, oil prices lost more ground following Tuesday’s 3.6% drop.

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

8:00 a.m.: Germany Jan. Industrial Production
8:30 a.m.: Hungary Feb. CPI
8:45 a.m.: Riksbank’s Breman speaks
9:30 a.m.: ECB’s Visco speaks
10:00 a.m.: Italy Jan. Retail Sales
10:30 a.m.: BOE’s Dhingra speaks
11:00 a.m.: Euro-Area 4Q GDP
11:00 a.m.: ECB’s Lagarde and Panetta speak
2:15 p.m.: US Feb. ADP Employment
2:30 p.m.: US Jan. Trade Balance
4:00 p.m.: Fed’s Powell testimony in US House
4:00 p.m.: BOC Rate Decision
4:00 p.m.: US Jan. JOLTS Job Openings
4:30 p.m.: EIA Crude Oil Inventories
Poland Rate Decision

Corporate Events

Earnings include Adidas, Thales, Brenntag, MongoDB


To learn more about Ballinger & Co., please visit our website or our LinkedIn page.