Morning Report

Morning Report – Thursday 14th May

Main Headlines

The BOE looks poised to boost its asset buying. Governor Andrew Bailey said it’s “pretty clear” investors expect its QE program to be expanded, and policy makers have kept the option open to build on the 200 billion-pound program undertaken in March as they cushion the pandemic’s economic toll. “We can help to spread over time the cost of this thing to society,” he said in televised interview.

Global equities were mixed, with European stock futures and Asian equities falling after Wall Street’s drop. Cisco’s better-than-feared sales forecast gave a lift to Nasdaq futures. Treasuries added gains, while gold fell. The Aussie slid after data showed a record plunge of over half a million jobs in April. Oil traded higher.

The pandemic will erase four years of world growth and may push 130 million into poverty by 2030, the UN said. The report forecast a 3.2% drop in global growth this year. Trump accused infectious disease expert Anthony Fauci of playing “all sides of the equation” in warning that reopening too soon could spark virus flare ups. “To me it’s not an acceptable answer, especially when it comes to schools,” the president said. Infection rates eased nationwide but accelerated to 3.3% in Texas.


The U.K. economy contracted by 2% in the first quarter of the year. The latest reading was better than consensus expectations of a 2.6% fall. It’s also better than the 3% drop the BOE forecast in its “illustrative scenario” in the May Monetary Policy Report. Meanwhile, Chancellor of the Exchequer Rishi Sunak warned the U.K. faces a significant recession.


Italy doubled down on its stimulus efforts, approving a much-delayed 55 billion-euro package aimed at boosting liquidity for businesses and aiding to families. The plan includes emergency income measures, extra funding for firms and tax cuts worth some 4 billion euros. German GDP data this week will reflect on how Europe’s biggest economy nosedived in Q2. The pandemic is threatening to turn the long lasting divide between Europe’s richer north and poorer south into an economic gulf which could put its currency at risk.


The greenback is on track for a third day of gains after Federal Reserve Chairman Jerome Powell warned of economic risks from the virus and dismissed the idea of negative rates. The dollar gained against all G10 currencies except the yen and Norwegian krone; South Pacific currencies were among the underperformers.

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

  • 8:00 a.m.: Spain April CPI
  • 9:00 a.m.: ECB publishes Economic Bulletin
  • 9:00 a.m.: Italy March trade
  • 11:30 a.m.: BOE’s Bailey speaks
  • 1:30 p.m.: U.S. initial jobless claims
  • 4:00 p.m.: ECB’s Guindos speaks

Corporate Events

Earnings include Ubisoft, Scout24

Corporate Highlights

  • Fiat Chrysler and PSA will scrap 1.1 billion euros of dividends each agreed to pay as part of their merger agreement.
  • Deutsche Telekom confirmed its 2020 guidance and adjusted Ebitda of 6.5 billion euros beat consensus.
  • Wirecard said it still expects full-year earnings to rise and kept its forecast.
  • Cisco’s forecasts beat expectations as people working and socialising from their homes drove demand for network equipment.