Morning Report

Morning Report – Friday 19th June

Main Headlines

Today marks a quadruple witching in the U.S., with options and futures on indexes and equities set to expire. The quarterly event causes trading volume and volatility to increase. About $1.8 trillion of S&P 500 options will expire, making it the third-largest non-December expiration ever, Goldman said. Rebalancing may force $48 billion of trades, up from $30 billion six months ago, S&P Dow Jones estimated.

Strangely risk assets rose along with havens overnight. Asian stocks drifted higher with U.S. and U.K. futures and WTI crude cruised past $39 a barrel. Chinese equities outperformed on the back of monetary easing speculation and signs the peak of Beijing’s recent outbreak has passed. Treasuries climbed with gold and the yen.

Boris Johnson announced a £1 billion package to help British children catch up on schooling they missed during the lockdown. State primary and secondary schools will be able to draw on £650 million of funding, with school principals to decide on the spending. A separate £350 million-pound fund aims to pay for tutoring for as many as 2 million of the most disadvantaged children.


Sterling was sold off against the dollar and euro yesterday after the Bank of England increased its bond-buying programme by £100 billion to bolster the coronavirus-hit economy. The central bank, which also kept its benchmark interest rate at 0.1%, said it expected a new total of 745 billion pounds in government bond purchases to be hit by the end of the year. Analysts said a planned slowing in the pace of the Bank’s asset purchases amounted to a slightly hawkish stance.


European Union leaders hope to unite behind an unprecedented stimulus to inject billions of euros into their coronavirus-ravaged economies at a virtual meeting today. The 27 national heads join a video conference to discuss recovery for the bloc that has lost over 100,000 lives to COVID-19 and faces an unprecedented economic downturn threatening its stability and global standing. The euro is trading lower as market participants await news on the package.


The dollar is on course for its best week in a month as a resurgence in coronavirus cases knocked confidence in a rapid economic recovery and drove investors to the safety of the world’s favoured reserve currency. Geopolitical tensions on the Korean peninsula, in the Himalayas and between China and its trading partners have also dented the mood, and the balance of risks kept moves modest overnight.

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

9:00 a.m.: ECB, Italy April current account
11:30 a.m.: Russia rate decision
5:00 p.m.: Russia May unemployment, retail sales
European leaders hold online summit

Corporate Highlights

Wirecard had an awful day yesterday. Its outgoing COO was suspended after about 1.9 billion euros in cash went missing. Loans worth up to 2 billion euros could be terminated if results aren’t published by today. This after the stock sank 62% following the fourth delay of its annual report.