Morning Report

Morning Report – Thursday 2nd July

Main Headlines

Vladimir Putin won a resounding endorsement for his bid to extend his two-decade-long rule potentially to 2036, even as some polls showed his approval ratings near historic lows. The Central Election Commission said 78% of Russians voted for the proposal, with more than three-quarters of precincts counted. Turnout was 65%.

Goldman Sachs said on Thursday a pick-up in commuting, a shift to private transportation and government efforts to improve economies with higher infrastructure spending should help global oil demand return to pre-coronavirus levels by 2022.

California and New York backtracked on reopening, the latest to do so. California banned indoor dining in areas including Los Angeles after a day of record infections, and New York delayed the restart of such services. Arizona had record cases and visits to emergency rooms, while Houston-area hospitals saw ICU rooms reach 102% of capacity. Disease expert Anthony Fauci said data show the benefits of masks and early medical advice to the contrary was “detrimental.” New U.S. cases topped 50,000 for the first time.

On the drug front, an early trial of an experimental vaccine from Pfizer and BioNtech showed promise, winning praise from Wall Street analysts and showing the industry remains on track for having a potential shot by January.

Risk assets were back in demand, with European stock futures rising with Asian equities and U.S. contracts signalling more gains for Wall Street after the Nasdaq hit a record. Hong Kong shares climbed as investors shrugged off the national security law as they returned from a holiday. The won and Kiwi led gains for currencies. Treasuries were little changed. Gold slipped. WTI crude erased earlier losses.


Sterling rallied yesterday after upbeat U.S. data reduced safe haven demand and British manufacturing survey data pointed to a small increase in output after the historic collapse caused by the coronavirus. Although concerns that Britain will fail to secure a trade agreement with the European Union continue to weigh on the currency, the pound could be in demand sooner rather than if the as the probability of a deal being agreed continues to increase.


The euro is little changed from earlier this week even though European Central Bank (ECB) Chief Economist Philip Lane insists that the Euro Area is in “the second stage of recovery,” and it remains to be seen if the US Non-Farm Payrolls (NFP) report will influence the exchange rate as employment is expected to increase for the second consecutive month.


The dollar was on the defensive this morning following upbeat U.S. and European economic data, though worries about the coronavirus blunted more aggressive risk taking ahead of upcoming U.S. jobs figures due today. Against a basket of currencies, the greenback slipped marginally and is tracking toward its worst week in a month ahead of non-farm payrolls figures which are expected to show an increase of 3 million jobs last month.

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

8:00 a.m.: Spain June unemployment
9:00 a.m.: Italy May unemployment
10:00 a.m.: Euro-Area May unemployment, PPI
1:30 p.m.: U.S. June jobs report
2:00 p.m.: ECB’s Mersch speaks
6:00 p.m.: ECB’s Schnabel speaks
6:00 p.m.: Baker Hughes rig count