Morning Report

Morning Report – Tuesday 13 April

Jon Robson, Head of Trading

“Ahead of the release of the U.S. March CPI figures, the dollar climbed slightly. It is unlikely to move much further as continued improvement in growth data will likely give US equities a further boost, reducing demand for safe haven currencies.”

Main Headline

The US budget deficit grew to a record $1.7 trillion in the first half of the fiscal year as a third round of stimulus payments sent federal spending soaring. The budget gap for March was over 4.5 times wider than what it was for the same period a year ago. Budget deficits are likely to remain at the centre of debates over the Biden administration’s next major legislative effort: a $2.3 trillion proposal that aims to bolster long-term economic growth through investments in infrastructure, clean energy and education.

The UK government announced that it has hit the target of offering a Covid vaccine to all over-50s, the clinically vulnerable and health care workers a few days early. The NHS is entering the second stage of the vaccination rollout this week, with a fresh target of offering all adults a vaccine by the end of July. Nearly 40 million shots have been given to more than 32 million people in the U.K.. The two main vaccines on offer have been AstraZeneca Plc and Pfizer-BioNTech, and a third from Moderna Inc. began to be rolled out last week.


Sterling is higher against other major currencies this morning. The European Commission has urged against Britain being allowed to rejoin an international legal co-operation agreement. Renewing the U.K’s membership of the convention has been a priority for Britain’s legal services industry, which has warned that without accession, English court judgments about cross-border disputes risk losing their force within the countries covered by the co-operation pact.


The euro is weaker versus most other majors overnight. Parties in Angela Merkel’s conservative alliance split their recommendations for the bloc’s chancellor candidate, setting up a tense showdown just months before national elections. The EU’s defence chief has warned that the pandemic has weakened the ability of militaries to respond to security threats and called for a greater focus on technology and maritime co-operation.


The dollar is higher against the euro and lower against the pound in the early morning trade. Om Monday afternoon, Biden said the U.S. needs to address an ongoing shortage of semiconductors by investing in its chip “infrastructure.” Meanwhile, the media report that investors and asset managers are lamenting being left out of plans to bolster America’s infrastructure, as the Biden administration pushes a tax-and-spend approach to building projects.


Asian equities erased gains Tuesday and U.S. stock futures slipped as traders await inflation data, a Treasury auction and corporate earnings to assess the market outlook. Bond yields climbed. Shares fell in China, where concern about the financial health of a key bad-debt manager soured the mood. Data showed a surge in China’s trade, though export growth missed forecasts in March. U.S. equity futures dipped after the S&P 500 inched back from a record. European contracts were steady. Oil traded at around $60 a barrel. Bitcoin climbed back above $60,000 ahead of a listing by the largest U.S. cryptocurrency exchange.

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

9:00 a.m.: Turkey Feb. Industrial Production

10:00 a.m.: Italy Feb. Industrial Production

10:30 a.m.: Spain sells bills

11:00 a.m.: Germany, Euro-Area April ZEW Survey

11:00 a.m.: Italy, U.K. sell bonds

11:30 a.m.: Germany sells linkers

12:30 p.m.: ESM sells bills

2:30 p.m.: U.S. March CPI

4:30 p.m.: ECB’s Villeroy speaks

OPEC monthly oil market report

IMF’s Georgieva and European Commission’s Gentiloni discuss the European Recovery and Resilience Facility

Corporate Events

Earnings include JD Sports

LVMH reports first-quarter sales, Just Eat gives first-quarter trading update


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