Morning Report

Thursday 10 June, 2021

“There has not been much volatility among major currencies this week, and investor caution reached its highest point overnight, ahead of the release of US CPI data and jobless claims, as well as the ECB policy meeting. Sterling remains under pressure as the UK and EU continue to be locked in a dispute over Brexit checks in Northern Ireland.”

Sam Cornford, Senior FX Dealer

Main Headlines

The US is planning to donate 500 million coronavirus vaccine doses produced by Pfizer to the rest of the world. The Biden administration expects 200 million of the Pfizer doses to go to other countries this year and 300 million across the first half of next year. The US president is expected to make the announcement in the UK later today. It is understood that White House Covid-19 coordinator Jeff Zients and his team negotiated the deal to buy the doses from Pfizer over the past four weeks. All of those doses will be donated through Covax, the global initiative to help vaccinate developing countries, and they will go to 92 lower-income countries and the African Union.

Boris Johnson and Joe Biden will meet for the first time today in Cornwall, where they will commit to resume travel between the U.K. and U.S. as quickly as possible. The will sign a 21st century “Atlantic charter”, pledging cooperation to tackle global challenges, including the rise of an authoritarian China. The meeting is also set to involve tensions: Biden will urge Johnson to work with the EU to end the stand-off over post-Brexit trading arrangements for Northern Ireland. In an attempt to reinforce a sense of shared history, Johnson has asked his adviser John Bew, a history professor, to talk through with Biden some historical documents relating to the 1941 charter.


Sterling is weaker against most major currencies this morning. A report published today by the Royal Institution of Chartered Surveyors reveals that U.K. house-price inflation showed no sign of cooling in May as strong demand and a growing supply shortage added fuel to a red-hot market. The gap between buyer inquiries and sale instructions ballooned to its widest since 2013. Meanwhile, Boris Johnson is examining a “mix-and-match” approach to easing lockdown restrictions in England on June 21, following a surge in cases of the Delta variant of coronavirus.


The euro is lower against the dollar and higher against the pound overnight. European Central Bank policy makers are due to meet today. Government bond yields in the euro area have fallen to their lowest level since April, reducing the need for aggressive stimulus, but the ECB may err on the side of caution given insufficient evidence that the economic rebound from the pandemic is sustainable. The bank boosted the speed of bond-buying earlier this year in response to rising yields that could threaten the recovery.


The dollar is higher against other majors in early morning trade. JBS paid an $11 million ransom to cybercriminals who last week temporarily knocked out plants that process roughly one-fifth of America’s meat supply, the company’s chief executive said. Elsewhere, President Biden revoked a Trump-era attempt to ban Chinese-owned apps TikTok and WeChat, substituting an executive order mandating a broad review of apps controlled by foreign adversaries to determine whether they pose a security threat to the U.S. The new order doesn’t target any companies specifically, but creates the potential for an even broader crackdown on Chinese-owned apps.


Most Asian stocks rose Thursday as U.S.-China talks helped sentiment and bolstered the offshore yuan. Treasuries rallied ahead of a U.S. inflation report that may provide clues on the monetary policy outlook. Chinese and Hong Kong shares advanced, while Japan ended flat. U.S. and European equity contracts edged up. The S&P 500 again flirted with a record before slipping, continuing a pattern of range-bound trading also evident at a global level. The offshore yuan climbed after the Chinese and U.S. commerce ministers agreed to push forward trade and investment links in their first call since the start of President Joe Biden’s administration. The 10-year Treasury yield extended a slide below 1.5%, signalling support for the view that the rebound from the pandemic will stoke only a transient bout of elevated inflation. Australia’s 10-year yield declined.

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

8:45 a.m.: France April industrial production

9:30 a.m.: Sweden May CPI

10:00 a.m.: Italy April industrial production

11:00 a.m.: Italy sells bonds

1:45 p.m.: ECB rate decision

2:05 p.m.: BOE’s Haldane speaks

2:30 p.m.: ECB’s Lagarde speaks

2:30 p.m.: U.S. May CPI, jobless claims

6:00 p.m.: USDA June WASDE Report

Biden holds bilateral meeting with Johnson

OPEC publishes monthly Oil Market Report

Iran nuclear deal talks reconvene in Vienna

EU environment ministers meet

Corporate Events

Earnings include Auto Trader, Halma

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