Morning Report

Morning Report – Friday 16 April

Jon Robson, Head of Trading

“The dollar was barely affected by yesterday’s surprisingly strong data on sales and unemployment. The global risk sentiment remained positive, while market participants increasingly bought into the Fed’s commitment to the accommodative policy. As a result, we saw the dollar heading for its worst back-to-back weekly drop this year alongside an extended dip in 10-year Treasury yields.”

Main Headline

The U.S. economy is showing signs of accelerated recovery as stimulus checks, Covid-19 vaccinations and business re-openings spur a spring surge in consumer spending, a sharp pullback in layoffs and a bounceback in factory output. US retail sales in March rose by the most in 10 months while the number of Americans filing for new unemployment benefits fell by 193,000 to 576,000 in the week ending April 10, according to data published on Thursday. That beat economists’ expectations for 700,000 new claims.

Boris Johnson will urge the Indian Prime Minister Narendra Modi to cut import tariffs on British whisky and cars as part of an ambitious plan to negotiate an interim free trade agreement in under a year. Johnson will announce a target to “more than double trade with India to £50bn by 2030” on a visit to New Delhi later this month, although the government documents concede that securing a full trade deal will be “challenging”. As a new strain of Covid-19 is causing a dramatic surge in infections in India, the trip will be shorter than what had originally been planned.


Sterling is lower against most major currencies this morning. UK job vacancies have recovered to the level before the first lockdown in April with hiring boosted by the reopening of non-essential shops, pubs and client-facing services such as hairdressers. The number of online job adverts posted on 9 April was the highest level seen since 6 March 2020, according to data published by the Office for National Statistics.


The euro is weaker against the dollar and stronger versus the pound overnight. France has surpassed 100,000 deaths from Covid-19 and the German health care system is being stretched to the brink, with many hospitals overwhelmed and rising case numbers indicating tougher days are to come. Elsewhere, Italy’s debt this year will exceed the country’s previous record amassed in the aftermath of World War I.


The dollar is higher against most other majors in early morning trade. A group of bipartisan lawmakers began feeling out the possibility of reaching a compromise on an infrastructure package, while some Republicans began working on an alternative to President Biden’s $2.3 trillion plan. Biden has imposed sweeping new sanctions against Russia including measures targeting its government debt, the expulsion of 10 Russian diplomats from the US and sanctions against 38 entities, individuals and companies.


MSCI Inc.’s Asia-Pacific gauge rose but more modestly than the Wall Street rally. China outperformed, after data showed the nation’s economy soared in the first quarter as consumer spending strengthened, suggesting a more balanced recovery. European equity contracts climbed and U.S. futures ticked lower after the S&P 500 and Nasdaq 100 hit all-time highs on strong retail sales and jobless claims figures. Financials weakened amid the slide in bond yields, even after Citigroup Inc. and Bank of America Corp. beat trading-revenue forecasts. Traders suggested foreign buying and geopolitical risks may have contributed to the rally in Treasuries, with many investors caught positioned for further weakness.

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

8:00 a.m.: EU27 March New Car Registrations

10:00 a.m.: Italy Feb. Trade Balance

11:00 a.m.: Euro-Area Feb. Trade Balance, March CPI

11:00 a.m.: BOE’s Cunliffe and Woods speak

12:00 p.m.: U.K. sells bills

3:00 p.m.: Italy releases quarterly economic bulletin

6:00 p.m.: Russia March PPI

7:00 p.m.: Baker Hughes U.S. Rig Count

EU finance ministers meet


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