Morning Report – Tuesday 14th July

Main Headlines

Britain is poised to ban Huawei from its 5G mobile network. In a two stage plan, British phone companies won’t be able to add any new Huawei equipment to their 5G networks by the end of the year. After that, all existing Huawei installations would need to be removed from 5G networks by 2027. Boris Johnson will receive the plan today, with an announcement to the House of Commons later.

European futures fell with Asian stocks amid concern over the economic impact of rising coronavirus cases. Chinese shares led declines in Asia despite a surprise gain in exports amid signs Beijing is seeking to cool speculative fervour. U.S. futures climbed. Treasuries edged lower and industrial metals slid.

The Trump administration rejected China’s expansive claims in the South China Sea, escalating tensions with Beijing on yet another front. The move reverses a previous policy of not taking sides in territorial disputes in the region. In the past, the U.S. has called for protecting “freedom of navigation” in the contested waterway while stopping short of taking a position on specific territorial claims.

GBP

The U.K. economy grew 1.8% in May from April, slower than the 5.5% estimate and leaving output down by 19.1% in the latest three months. The pound had been boosted by risk appetite over the last few sessions however, GDP data has caused a dent in its recent momentum as investors evaluate global recovery hopes.

EUR

The euro held onto gains against the greenback and the pound as investors await data on German investor sentiment to help gauge the pace of Europe’s recovery from the health crisis.

USD

The dollar was marginally higher against most currencies on this morning as renewed concerns about diplomatic tension between the United States and China and rising coronavirus cases put a dent in risk appetite.

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

8:00 a.m.: Spain June CPI
8:30 a.m.: Sweden June CPI/CPIF
10:00 a.m.: Euro-area May industrial production
10:00 a.m.: Germany July ZEW Survey
10:00 a.m.: Netherlands to sell bonds
10:00 a.m.: Italy to sell bonds
10:30 a.m.: Belgium to sell bonds
French President Macron to give Bastille Day address
Poland rate decision