Morning Report

November 18, 2021

“While inflationary pressures are supporting surges in the dollar and the pound, market participants still believe that the ECB will lag behind UK and US central banks in hiking rates. As a result, the euro has sunk to the lowest level in 16 months.”

Sam Cornford, Partner and Head of Trading

Main Headlines

President Biden called on the Federal Trade Commission to investigate whether oil-and-gas companies are participating in illegal conduct aimed at keeping gasoline prices high, in the latest effort by the White House to respond to public concerns about costs for everything from fuel to groceries. In a letter to FTC chair Lina Khan, Biden said there was “mounting evidence of anti-consumer behaviour” in the market, noting that the two “largest oil and gas companies . . . as measured by market capitalisation” were planning “billions of dollars of stock buybacks and dividends” even as prices at the pump continue to rise.

Boris Johnson will on Thursday unveil £96bn of investment in rail links to boost northern England but the watered down plans risk inciting the wrath of MPs in the region. When he announces a new Integrated Rail Plan, the prime minister will confirm cuts to the north-south High Speed 2 and the High Speed 3 line from Leeds to Manchester. Johnson will insist it amounts to the “biggest ever public investment in Britain’s rail network”. The government is going ahead with building the western leg of High Speed 2 from London to Manchester via Birmingham, but an eastern leg from Birmingham to Leeds is now being slashed.


Sterling is higher against most major currencies this morning. The venture capital arm of the state-owned British Business Bank, British Patient Capital, has acquired its first direct stakes in a range of UK start-ups, adding to a growing portfolio of investments made by the government to support companies during and after the pandemic. MPs have voted to ban themselves from working as paid political consultants or lobbyists as the row over sleaze continued to dominate British politics on Wednesday. Boris Johnson is considering flying a crate of cash to Iran to settle British debts with Tehran and help secure the release of the UK-Iranian detainee Nazanin Zaghari-Ratcliffe.


The euro is higher versus the dollar and lower against the pound overnight. EU lawmakers have reached a breakthrough on how to target tech companies, including Apple and Google, as part of moves by Brussels to curb anti-competitive practices in the digital economy. Companies with a market capitalisation of at least €80bn and offering at least one internet service, such as online search, will be drawn into the planned Digital Markets Act. Ireland, Slovakia and the Czech Republic are set to introduce new Covid-19 restrictions in the coming days.


The dollar is weaker against most majors in the early morning trade. Federal Reserve Vice Chair Richard Clarida said the “necessary conditions” to raise the US central bank’s benchmark lending rate from near zero will probably be in place at the end of next year. More Wall Street banks are now betting that the Fed will hike rates at a faster-than-expected pace, with Citi joining Morgan Stanley in backing trades that will profit if the central bank does just that. Economists have warned that Biden’s $2 trillion tax and spending bill will act to push up inflation further if passed by Congress.


Most Asian stocks fell Thursday amid a tumble in Chinese technology shares. MSCI Inc.’s Asia-Pacific index declined for a second day. A Hong Kong technology gauge slid in the wake of Baidu. and Bilibili earnings, which sparked concerns about slowing advertising revenue. Japan pared losses on a report that planned fiscal stimulus will amount to 55.7 trillion yen. US equity futures rose and European ones fluctuated. Oil extended losses on the prospect of the US and others tapping strategic reserves. China said it’s working to release some crude from its stockpile. Treasuries were steady. New Zealand’s currency advanced after inflation expectations climbed, stoking bets on interest-rate increases.

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

8:00 a.m.: Euro-area Oct. new car registrations
8:00 a.m.: Norway 4Q oil investment survey
10:00 a.m.: Norges Bank 4Q expectations survey
10:30 a.m.: ECB’s Centeno, Credit Suisse’s Osorio speak at online event
11:00 a.m.: ECB’s Panetta speaks on digital currencies in EU Parliament
12:00 p.m.: Turkey one-week repo rate
2:00 p.m.: Russia gold and forex reserve
3:30 p.m.: ECB’s Lane speaks at Fed-EU conference
SARB announces interest rate
JODI-Oil data

Corporate Events

Earnings include Storskogen, Royal Mail, Valneva, Daily Mail, Thyssenkrupp, Jet2, Kohl’s, Macy’s, National Grid, FarFetch, Portillo’s, Petco, Applied Materials, Workday, Palo Alto Networks, Intuit, HireRight, Williams-Sonoma 1:15 p.m.: ECB’s Lane speaks
2:00 p.m.: Russia gold and forex reserve
5:00 p.m.: ECB’s Schnabel speaks
U.S. VP Kamala Harris to meet Macron and speak at Paris Peace Forum
EU trade ministers discuss WTO reforms in Brussels
CPC crude loading program for December
Holidays: U.S., Canada, France, Belgium, Angola, Poland

Corporate Events

Earnings include SMIC, Wix, Burberry, Aegon, Paysafe, Sundial Growers, 3i, RWE, Suzuki, Bridgestone, Bechtle

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