Morning Report

Morning Report – Wednesday 20th January

Jon Robson, Head of Trading

“As expected, Janet Yellen confirmed she will affirm the U.S.’s commitment to market-determined exchange rates emphasised the US does not seek a weaker dollar for competitive advantage however, this is a significant shift from previous policy of a stronger currency.”

Main Headlines

Donald Trump said the movement he started as President was “only just the beginning” acknowledging the transfer of power while also not mentioning President-elect Joe Biden by name. This is an incredibly damaging assertion and could be construed as encouraging rioters to continue to fight against the legitimacy of the election.

Janet Yellen pledged a hard line against currency manipulation and touted the importance of market based exchange rates in her Senate Confirmation hearing yesterday. US stocks rose as Yellen made the case for large scale fiscal stimulus.


The pound is higher against the dollar and unchanged against the euro in trading this morning. Former Prime Minister Theresa May launched an extraordinary attack on Boris Johnson yesterday, over breaking the Brexit withdrawal agreement and cutting overseas aid. Inflation data is released this morning, while Bank of England Governor Bailey is also set to speak.


The euro is higher against the dollar in early morning trading today. Italy’s Prime Minister narrowly survived a no-confidence vote yesterday as the country tries to grapple with both an economic and health crisis. The ECB is reportedly buying bonds to limit the differences in yields for the strongest and weakest economies in the Eurozone.


The dollar is lower against a set of major currencies including the Japanese Yen. Donald Trump will break precedent by not attending Joe Biden’s inauguration today. Trump has also lost an ally in Mitch McConnell who attacked him for his role in the Capitol Hill insurrection two weeks ago. The day is light on the economic data front, as investors will pay close attention to Biden’s inauguration speech for any clues on his policy.


US equities rose this morning on the expectation that extra stimulus is forthcoming. Asian equities were mixed as investors weighed up comments suggesting that Joe Biden will continue a tough line towards China. Treasury yields are steady, while Oil prices edged higher.

Main Economic Data/Central Banks/Government (All times GMT)

9:30 a.m.: U.K. Nov. House Price Index
10:00 a.m.: Euro-Area Dec. CPI
10:30 a.m.: Germany sells bonds
12:00 a.m.: Russia sells bonds
5:00 p.m.: BOE’s Bailey and Brazier take questions from citizens’ panel
Joe Biden inaugurated as U.S. president

Corporate Events
Earnings include Morgan Stanley, P&G, US Bancorp, BNY Mellon, Kinder Morgan