Morning Report – Wednesday 10 February

Jon Robson, Head of Trading

“The U.S. dollar dipped further overnight, despite active market participants continually reducing what remains a fairly significant dollar short exposure. The prospect of a sudden spike in inflation will be haunt the dollar in the coming months.”

Main Headlines

Joe Biden met US business leaders including Jamie Dimon, chief executive of JPMorgan Chase, and Doug McMillon, chief executive of Walmart, as he sought support from titans of corporate America for his $1.9tn stimulus plan. The gathering in the Oval Office on Tuesday afternoon was Biden’s first with top business executives since his January 20 inauguration.

Passengers arriving in England who try to conceal they have been to countries on a list of high-risk destinations face up to 10 years in jail as part of a series of tough new quarantine restrictions announced on Tuesday by health secretary Matt Hancock. Amid growing concerns among ministers over the threat from new coronavirus mutations, from Monday all travellers coming to the country will need to take two Covid-19 tests.

GBP

Sterling is bid versus the dollar and euro this morning. The U.K.’s immunisation drive showed one dose of the Pfizer-BioNTech vaccine gave two-thirds protection against Coronavirus, data seen by the government suggests. The British government was accused on Tuesday by Conservative backbenchers of using “arcane procedural games” to avoid a rebellion on its trade bill, as pressure grew to toughen its stance on China through the legislation.

EUR

The euro is stronger against most major currencies in the early morning trade. German Chancellor Angela Merkel wants a gradual reopening of stores and hotels next month, as long as the infection rate continues to fall and reaches manageable levels. European Commission President Ursula von der Leyen will appear before European parliament amid recent criticism over issues like vaccines rollouts and the Irish border.

USD

The dollar edged lower versus most majors overnight. U.S. job openings unexpectedly rose in December, led by increases in business services and retail trade, signaling that companies were looking to add workers as the nation starts getting vaccinated against the coronavirus. The Senate voted on Tuesday to proceed with the second impeachment trial of Donald Trump, after an afternoon of arguments on whether it was constitutional to try a former president.

Markets

Global stocks rose to another record and equity futures advanced Wednesday. Tencent Holdings Ltd. fueled gains in Hong Kong as an Asian equity gauge hit an all-time high. U.S. and European futures climbed. Treasuries were steady. On Tuesday, the S&P 500 index snapped a six-day winning streak. Platinum rallied to a six-year high on expectations it will benefit from tight supplies, investment demand and the global recovery. Oil was little changed after the longest run of gains in two years, gold was up.

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

8:00 a.m.: Turkey Nov. unemployment

8:00 a.m.: Germany Jan. CPI

8:45 a.m.: France Dec. Industrial production

9:30 a.m.: Riksbank Rate Decision

10:30 a.m.: ECB’s de Cos speaks

11:00 a.m.: U.K. sells bonds, Italy sells bills

11:30 a.m.: Germany sells bonds

1:00 p.m.: Russia sells bonds

2:00 p.m.: ECB’s Panetta speaks

4:30 p.m.: EIA Crude Oil Inventory Report

Corporate Events

Earnings include Adyen, Maersk, Delivery Hero, Metro AG, Coca-Cola, Uber, GM

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