Morning Report

Morning Report – Tuesday 19th May

Main Headlines

Donald Trump called WHO a “puppet of China” and escalated pressure on the UN’s public health agency with a letter demanding “major substantive improvements within the next 30 days.” If he’s not satisfied with the changes, the temporary freeze which he has placed on U.S. funding will become permanent.

Asian stocks tracked gains on Wall Street after early results for an experimental vaccine sparked speculation economies could snap back quickly. Global futures have held yesterday’s gains going into the European open. Treasury yields fell before Fed chief Jerome Powell’s virtual hearing. WTI closed at a two-month high in New York.

The BOE’s debate over negative rates kicked up a gear after Silvana Tenreyro noted that instances of sub-zero rates in the EU “have had a positive effect in the sense of having a fairly powerful transmission to real activity,” and the BOE isn’t ruling anything out at this stage. Powell said the Fed will stay near zero until he’s confident the economy “is on track to achieve our maximum-employment and price-stability goals.”

Moderna is raising $1.3 billion to fund manufacturing of its experimental coronavirus vaccine. The company priced its offering at $76 per share, or a 5% discount to yesterday’s close, people familiar said. Positive test results for the drug helped spur the rally in risk assets.


The number of Britons seeking jobless benefits spiked the most on record last month as the coronavirus lockdown sent shock waves through the U.K. economy. Jobless claims rose 856,500 to more than 2 million in April, the Office for National Statistics said Tuesday. The claimant count rate climbed to 5.8%, the highest in more than two decades. The U.K. set out its tariffs plan for global trade when it fully leaves the EU at the end of this year, cutting import duties on many products while protecting industries such as automotive and agriculture. Sterling has rallied significantly since touching recent range lows overnight on Sunday.


German Chancellor Angela Merkel and French President Emmanuel Macron agreed to support a 500 billion-euro aid package to help the European Union recover from the coronavirus pandemic in a major step toward tighter integration. Merkel said that Germany would accept a fund within the framework of the EU budget, financed by additional borrowing, that would make grants to member states that have been hardest hit by the virus. Crucially, she said the bonds issued by the European Commission would be repaid from the EU budget, the lion’s share of which is covered by Germany. Italian bonds subsequently rallied. The Euro gained the most in in almost six weeks on this news.


The dollar is lower against the majority of G10 currencies as risk aversion abates on renewed optimism relating to the opening of economies and a potential vaccine. Treasury bill sales are coming to the forefront of attention for their potential impact on funding markets. The U.S. has sold more than $1.5 trillion of cash management bills since the end of March, with record sizes also seen at conventional bill sales. Another $136 billion of Treasury bills will be sold Tuesday, coming on the heels of $117 billion a day earlier.

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

  • 7:00 a.m.: U.K. March unemployment
  • 9:00 a.m.: Spain March trade balance
  • 10:00 a.m.: Germany, Euro-Area May ZEW Survey
  • 10:30 a.m.: ESM sells bills
  • 2:00 p.m.: Russia 1Q GDP
  • 3:00 p.m.: ECB’s Lane speaks
  • 3:00 p.m.: Fed’s Powell speaks

Corporate Events

  • Earnings include Walmart, Home Depot, NetEase, Imperial Brands