Morning Report

Morning Report – Tuesday 28th July

Main Headlines

Gold’s relentless rise took a pause after it topped $1,980, a new record. This week’s Fed meeting may open a path for further advances. South Korea led most Asian equity benchmarks higher, with tech shares outperforming. Japanese shares erased early gains, dipping into the red, while FTSE 100 and S&P 500 futures contracts advanced. Treasuries dipped. Brent edged higher, and WTI was steady.

The ECB asked lenders to hold off on dividends and buybacks until next year to conserve their financial strength. That’s an extension of the March move to halt payments at least until October. Banks including BNP Paribas have lobbied to resume the pay-outs. The ECB says its request kept about €30 billion of capital in the euro-area banking system.


Lacking any significant drivers of its own, sterling was pushed up by a broadly weaker U.S. dollar on yesterday, as uncertainty over Brexit and Britain’s economic prospects kept most investors on the fence. Speculators and real money managers have added short positions on the British currency in the week to Tuesday, though the number of contracts held were not as many as a couple of months ago. Britain and the European Union clashed last week over the chances of securing a free trade agreement, with Brussels deeming it unlikely, but London holding out hope one could be reached in September.


The EU is set to keep its external borders shut to most travellers for at least two more weeks, people familiar said. Spanish PM Pedro Sanchez slammed the U.K. for including the Balearic and Canary Islands in its travel ban. “The decision is unbalanced,” Sanchez told Telecinco. The euro is continuing to benefit from broad based dollar weakness. There are some suggestions that further strength in the common currency could counteract recent stimulus.


The dollar bounced off a two year low on Tuesday as selling pressure faded ahead of a Federal Reserve meeting and as political wrangling over the next U.S. fiscal rescue package moved closer to a conclusion. The world’s reserve currency has been on the slide since May and was dumped in recent days as cracks in the U.S. coronavirus recovery and crumbling yields sent investors elsewhere. Most analysts say the reasons for the dollar’s broad decline, especially falling real yields, remain intact but that the pace of the drop probably warranted a pause – particularly with a Fed meeting and a U.S. spending package in the offing.

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

8:00 a.m.: Spain 2Q unemployment rate
8:30 a.m.: Sweden June retail sales
9:00 a.m.: Hungarian central bank’s competitiveness report
3:00 p.m.: US Consumer Confidence

Corporate Events

Earnings include Aena, Arcadis, Bankia, Carrefour, Elementis, Fresnillo, Greggs, Kering, Maisons du Monde, Masmovil, Moneysupermarket, Rexel, St James’s Place, Canon, Pfizer, Raytheon, 3M, Starbucks, McDonald’s