Morning Report

Morning Report – Wednesday 8th July

Main Headlines

Boris Johnson warned Germany’s Angela Merkel that the U.K. is ready to do without a trade deal if the European Union wasn’t prepared to compromise. The prime minister spoke to the chancellor Tuesday, as Brexit negotiators held informal talks over a private dinner. Negotiations are stuck over issues including fishing rights, the future influence of EU courts in U.K. laws, and how far Britain will be able to loosen its rules and still enjoy access to the single market. “The prime minister underlined the U.K.’s commitment to working hard to find an early agreement out of the intensified talks process,” Johnson’s office said in a statement later.

The White House has sent a letter to the WHO that starts the one year notice period to exit. That came as U.S. virus cases rose 1.8% to just shy of 3 million, casting doubts on efforts to restart economies in hard hit southern states where the federal government aims to ramp up testing. Disease expert Anthony Fauci urged local leaders to mandate wearing masks.

U.S. stock futures edged up with Asian stocks, while Europe contracts traded lower. Hong Kong and Chinese shares ignored rising U.S.-China tensions as the Trump administration considers targeting Hong Kong’s dollar peg. Treasuries fell with gold. Oil dropped with most base metals.


Sterling is holding onto gains made earlier in the week as optimism remains that a deal could be agreed with the EU. British finance minister Rishi Sunak will announce his next moves today to prevent a wave of job cuts from snowballing into a full-blown unemployment crisis in the world’s sixth biggest economy. Sunak is already on course to take Britain’s borrowing to World War Two levels as he subsidises 9 million jobs, alongside other emergency measures.


Christine Lagarde signalled the European Central Bank will keep policy unchanged at its next meeting after its massive emergency stimulus helped calmed markets. Speaking in an interview with the FT published today, the ECB president said that measures unleashed in the wake of the pandemic have “demonstrated their efficiency, their effectiveness.” The Governing Council’s next decision is in just over a week, its first since it almost doubled the size of its pandemic purchase program to 1.35 trillion euros. Her comments confirm the ECB has effectively switched to a wait-and-see mode after the economy began to bounce back.


The dollar held onto small gains overnight as a resurgence of coronavirus in the United States and the return of lockdowns in some countries led to safe haven demand for the U.S. currency. Risk sentiment was also undermined after Federal Reserve officials expressed concern that rising coronavirus cases could harm economic growth just as stimulus measures start to expire.

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

7:00 a.m.: Norway May GDP
10:30 a.m.: Germany to Sell 5 Billion Euros of 2025 Bonds
3:00 p.m.: ECB Vice President Luis de Guindos speaks
3:30 p.m.: EIA weekly report on U.S. oil inventories
5:00 p.m.: Russia June CPI
U.K. Chancellor Rishi Sunak to give an economic update
Leaders from Serbia, Slovenia and Hungary hold online conference

Corporate Events

Earnings include CropEnergies, FirstGroup, Kungsleden
Daimler AGM