Morning Report

November 28, 2022

“USD edged higher over the weekend, supported by the rise in Covid cases in China and a further slowdown in economic activity. However, the currency declined and remained on the back-foot in early trading this morning amid the more positive tone to risk appetite. In the week ahead, there will be crucial data releases in the US, including the labour market report for November and the core-PCE inflation reading for October.”

Sam Cornford, Partner – Head of Trading

Main Headlines

Some Republicans criticised Donald Trump yesterday for dining with white supremacist Nick Fuentes at the former president’s Mar-A-Lago resort in Florida, even as Trump said the encounter was inadvertent. Arkansas Republican Governor Asa Hutchinson accused Trump of empowering extremism. Representative James Comer, a Republican lawmaker from Kentucky, said Trump needed “better judgment (on) who he dines with.” Trump earlier this month said he plans to seek the Republican nomination to run for the White House again in 2024, though he could face challengers to that bid, including from Florida Governor Ron DeSantis.

British Prime Minister Rishi Sunak plans to promise today to maintain or increase military aid to Ukraine next year, and to confront international competitors “not with grand rhetoric but with robust pragmatism”. British government support for Ukraine has remained unchanged, despite turmoil in recent months as Boris Johnson was succeeded as prime minister by Liz Truss and then Sunak. However, some Conservatives view Sunak as less hawkish on China than Truss. European Union officials have questioned whether Britain under Johnson was genuinely committed to its Brexit legal agreements, especially regarding Northern Ireland. On Ukraine, Sunak indicated no change with the policy pursued by Johnson and Truss.



Sterling is stronger against the dollar and weaker against euro this morning. Downing Street appears set to allow new onshore wind projects in England following years of an effective ban, Grant Shapps has indicated, with ministers giving way in the face of a growing backbench Conservative rebellion. Shapps, the business and energy secretary, said there would be more onshore wind projects “where communities are in favour of it”, which would mean the end of a de facto block on such projects since 2014 under planning rules.



Euro is well bid against most major currencies overnight. More than 90 per cent of Italian municipalities are prone to landslides or other natural disasters, the head of the national civil protection agency said. Meanwhile, Dozens of rioters torched a car, set electric scooters on fire and threw bricks at cars in Brussels after Belgium’s surprise 2-0 defeat to Morocco in the World Cup yesterday. Police had to seal off parts of the centre of the capital and deployed water cannon and teargas to disperse crowds after the violence.



The dollar is weaker than most major currencies in the early morning trade. A small plane crashed into a transmission tower in Maryland yesterday, knocking out electricity to roughly 117,000 customers as rescuers raced to extricate the two people on board who were trapped about 100 feet above the ground, the authorities said. The pilot, Patrick Merkle, 65, of Washington, and the passenger, Jan Williams, 66, of Louisiana, were rescued after midnight with “serious injuries,” Chief Scott Goldstein of the Montgomery County Fire and Rescue Service said at a news conference. It remained unclear what led to the crash.



European markets retreated slightly this morning as investors monitored unrest in China as protests against strict Covid measures and lockdowns erupted over the weekend. The pan-European Stoxx 600 was down 0.6% in early trade, with oil and gas stocks shedding 2% to lead losses as almost all sectors and major bourses slid into the red. Hong Kong stocks led losses in a negative Asia-Pacific session this morning amid the unrest in China over its continued zero-Covid policy. Oil futures hovered around new 2022 lows as demand concerns over the world’s second-largest consumer of oil weighed on prices.


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

9:00 a.m.: ECB’s Knot speaks
10:00 a.m.: Euro-area Oct. M3 Money Supply
12:00 p.m.: Ireland’s Oct. Retail Sales
2:25 p.m.: ECB’s de Cos speaks
3:00 p.m.: ECB’s Lagarde speaks
6:10 p.m.: ECB’s Nagel speaks



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