Morning Report

Wednesday 26 May, 2021

“The greenback has slipped further, extending an almost two-month fall against other major currencies. Weakness continues to stem from the Fed’s continued dovish monetary policy stance in spite of investor fears of inflationary forces driving interest rates higher”

Sam Cornford, Senior FX Dealer

Main Headlines

The Biden administration has called for a new, expert-led investigation into the origins of Covid-19, after the WHO’s international mission to China and subsequent investigation proved inconclusive. One of President Biden’s coronavirus advisers, Andy Slavitt, yesterday suggested that the initial investigation had not done enough to explain the origins of the disease and highlighted that “a completely transparent process from China” is needed.

Prime Minister Boris Johnson’s former chief aide, Dominic Cummings, will give evidence to senior MPs this morning during a hotly anticipated joint session of the health and social care and the science and technology Select Committees. Following the creation of a widely-followed 63-tweet long thread on Twitter, Cummings is expected to criticise many elements of the Government’s response to the coronavirus pandemic and reveal numerous government missteps. Conservative politicians fear that the former adviser’s testimony will tarnish the UK’s easing of restrictions and recent success in rolling out its vaccination programme by exposing failures in the Government’s initial handling of the pandemic.


Sterling is weaker against the dollar and stronger against the euro this morning. Chancellor Rishi Sunak is set to propose new powers to block companies from listing on the London Stock Exchange on national security grounds following government concern over the presence of “dirty money” in UK financial markets. Sunak will launch a consultation in the coming weeks for a stronger regime governing flotations, which will put forward proposals whereby the government could prevent a listing if it would provide foreign states access to state secrets or if a company is owned by a person whose activities could harm UK interests.


The euro is weaker against most other major currencies overnight. The EU is set to ask a Brussels court to order AstraZeneca to supply millions more coronavirus vaccine doses and examine whether the company violated the terms of its contract in the latest flashpoint in a bitter legal dispute.


The dollar is higher against the euro and the pound in the early morning trade. The Biden administration is reported to be introducing new, mandatory cybersecurity rules for pipeline operators in the wake of the Colonial Pipeline ransomware attack. The new security directive would force the pipeline industry to report cyberattacks to the Department of Homeland Security. Elsewhere, New York prosecutors have convened a grand jury to consider evidence in a criminal investigation into former President Donald Trump’s business dealings.


U.S. and European equity futures rose Wednesday and Asian stocks edged up. Treasuries trimmed a rally spurred by Federal Reserve officials again predicting transitory price pressures. MSCI Inc.’s Asia-Pacific share gauge climbed for a fifth day amid modest gains in Hong Kong and China, where the onshore yuan hit the highest level since June 2018. Wall Street stocks were hampered overnight by softer new home sales and consumer confidence data. Treasury yields are well below this year’s highs, with more Fed officials joining a chorus downplaying price pressures. Oil was steady and gold erased 2021 losses. Bitcoin climbed toward $40,000 in a partial recovery from last week’s crypto rout.

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

8:00 a.m.: Denmark April Retail Sales

8:45 a.m.: France May Business Confidence, Consumer Confidence

9:30 a.m.: Sweden April Unemployment

9:30 a.m.: Riksbank Publishes Financial Stability Report

10:00 a.m.: Poland April Unemployment

11:00 a.m.: ECB’s Villeroy speaks at French National Assembly

11:00 a.m.: Sweden sells bills

11:00 a.m.: Italy to sell Linkers, bonds

11:30 a.m.: Germany to sell bonds

6:00 p.m.: Russia May 24 CPI

Corporate Events

Earnings include SSE, Capri, Lukoil, Marks & Spencer



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