Morning Report

November 22, 2021

“Following a spike in Covid-19 infections in Europe, as Austria imposed a full lockdown and Germany considers doing the same, the dollar traded near a 16-month high against the euro. Bullish comments from Federal Reserve officials Richard Clarida and Christopher Waller on Friday suggesting a need to taper stimulus faster also contributed to the dollar’s strong position.”

Sam Cornford, Partner & Head of Trading

Main Headlines

Vice-Chair of the Federal Reserve, Richard Clarida opened the door to a faster withdrawal of its massive bond-buying programme, suggesting the central bank could take earlier-than-expected action to tame inflation. Clarida stated that Federal Open Market Committee could consider discussing the pace of the planned “taper” at its upcoming policy meeting in December. Earlier this month, the Fed began winding down its $120bn-a-month purchases of Treasuries and agency mortgage-backed securities but stated it would “adjust the pace” of tapering if required by the US economic outlook.

The Confederation of British Industry, the UK’s largest employer group is ready to work with the government to implement the levelling up agenda across the country. Tony Danker, Director-General of the CBI, referred to five decades of “benign neglect” of regional industries has left the UK with a “branch line”, London-centric economy that needs business and government to work together to correct. On Monday, the CBI’s annual conference will establish a regional unit and steering committee to support efforts to boost growth, skills and investment across the country. Danker reaffirmed that CBI members want to work with the government on levelling up, however, the plans to scrap the planned HS2 link between Leeds and the East Midlands has deeply upset companies.


Sterling is higher against the euro and lower against the dollar in overnight trade. British lender Kensington Mortgages is to launch fixed-rate mortgages of up to 40 years on Tuesday in what will be one of the first products of its kind in the UK market. The lender has partnered with Rothesay, the UK’s largest pensions insurance specialist which has more than £60bn in assets, to finance the longer-dated mortgages. Its “Flexi Fixed for Term” mortgages will allow borrowers to fix the rate paid on their mortgage for the full term of the loan — anywhere between 11 and 40 years. The long-term mortgages come amid concerns about rising inflation and increasing expectations that the Bank of England will need to raise interest rates to tackle it.


The euro is lower against most majors overnight. The EU’s point-man on Brexit, Maroš Šefčovič, said Sunday that he felt like the “only one” pushing for an urgent solution to problems with the Northern Ireland protocol in talks with his opposite number David Frost. The European Commission vice-president made the comments after Frost, the U.K.’s Brexit minister, called for “more ambition and more urgency” in the talks. Polish Prime Minister Mateusz Morawiecki described the migrant crisis at the border with Belarus as the greatest threat to the EU for three decades. A report by the International Institute for Democracy and Electoral Assistance (IDEA) says the number of democracies backsliding into authoritarianism has doubled in the past decade, including EU states Hungary, Poland and Slovenia.


The dollar is well-bid against most majors in early morning trade. The Biden administration is moving to close gaps between House and Senate Democrats on its roughly $2 trn Build Back Better Bill, so it can finalize the bill that serves as the centrepiece of the president’s agenda. To ensure revenue covers spending, Mr. Deese said the Biden administration is relying on “experts that have studied the provisions in this bill the most closely, the Congressional Budget Office as well as the Treasury Department.” Protesters gathered in Chicago to express frustration and anger about a jury’s decision to acquit Kyle Rittenhouse of all criminal charges over the fatal shooting of two people during unrest in Wisconsin last year.


Asian stocks were mixed and U.S. futures rose as traders weighed European Covid curbs and the risk of a faster Federal Reserve taper. The Treasury yield curve was near the flattest since the pandemic began. Equities outperformed Monday in South Korea aided by robust export data and climbed in China, whose central bank signalled possible easing to support a slowing economy. U.S. futures edged higher after a flavour of the stay-at-home trade on Friday saw economically sensitive sectors drag down the S&P 500 while the technology-heavy Nasdaq 100 advanced. Treasuries were little changed and the gap between yields on five-year and 30-year maturities was around the lowest since March 2020. Risk aversion has bolstered bonds as surging European infections push Austria toward a lockdown and spur Germany to tighten curbs. The curve flattened in part on signs the Fed may consider a faster drawdown of its bond-buying program to fight inflation.

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

8:00 a.m.: Denmark Nov. consumer confidence

10:00 a.m.: Poland Oct. PPI, sold industrial output

3:00 p.m.: ECB’s Holzmann, Kazaks, Kazimir and Czech National Bank’s Rusnok speak in Vienna

4:00 p.m.: Euro-area Nov. consumer confidence

4:00 p.m.: U.S. Oct. existing home sales

Reuters Energy Transition Europe conference begins

Libya Energy & Economic Summit begins

U.K. Labour leader Starmer delivers CBI Conference keynote address

Corporate Events

Earnings include: Prosus, Zoom, Big Yellow Group, Naspers, Agilent Technologies, Keysight Technologies


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